REG - Catalyst Media Group - Interim Results
30/03/2022 07:00
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RNS Number : 4264G Catalyst Media Group PLC 30 March 2022
30 March 2022
Catalyst Media Group Plc
("CMG", "Catalyst" or the "Company")
Interim Results for the Six Months Ended 31 December 2021
The Board of CMG (AIM: CMX) is pleased to announce the Company's unaudited
interim results for the six months ended 31 December 2021.
CMG is a 20.54% shareholder in Sports Information Services (Holdings) Limited
("SIS") and the results include its share in the profits/(losses) of SIS as an
equity accounted associate.
Financial Highlights for the six months to 31 December 2021
· CMG profit after taxation of £0.45 million (2020: loss of
£0.43 million)
· Earnings per share of 2.14p (2020: loss of 2.03p)
· Net asset value per share of 54.5p (2020: 58.7p)
· For the six months to 30 September 2021, SIS achieved
- Revenues of £113.4 million (2020: £68.6 million)
- Operating profit of £3.0 million (2020: loss of £2.4 million)
- Profit after tax on ordinary activities of £2.4 million (2020: loss
of £1.9 million)
· SIS did not declare or pay any dividends to CMG during the
reporting period or during the prior period.
· CMG has not declared nor paid any dividends during the
reporting period or during the prior period.
Current Trading and Outlook
Following the relaxation of COVID-19 restrictions in May 2021, SIS's UK and
Irish retail business has returned to normal operations whilst the Digital
business has continued to operate at levels higher than pre-COVID-19 and has
seen significant growth in its customer base. Additionally, the business has
continued to scale its latest products of Competitive Gaming (e-sports) and
Numbers draws.
SIS's profitability for its current financial year to 31 March 2022 is
anticipated to see a significant rebound and, SIS's management expects the
company to make a profit for the year as a whole in excess of its budget.
Enquiries:
Catalyst Media Group Plc
Michael Rosenberg, Non-executive Chairman Mob: 07785 727 595
Melvin Lawson, Non-executive Director Tel: 020
7734 8111
Strand Hanson
Limited
Tel: 020 7409 3494
James Harris / Matthew Chandler
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 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended.
Chairman's Statement
For the six month period ended 31 December 2021, the Company achieved a net
profit after taxation of £0.45 million (2020: loss of £0.43 million).
Net assets as at 31 December 2021 were £11.5 million (30 June 2021: £11.0
million). Net cash as at 31 December 2021 was £0.2 million (30 June 2021:
£0.2 million).
CMG's main asset remains its 20.54% stake in SIS and the Company received no
dividend from SIS during the reporting period or the prior period. The value
of CMG's investment in SIS has reduced from approximately £12.1 million to
approximately £11.3 million, due to its share of the loss incurred in the
year to 30 June 2021, albeit its share of the profit earned in the period to
31 December 2021 has slightly improved the investment value. As a result,
CMG's net assets per share as at 31 December 2021 were 54.5p (2020: 58.7p).
The carrying value of our investment in SIS will be reviewed again at our
financial year end.
CMG equity accounts for its share in the profit of SIS which was £2.4 million
after tax for its six month period to 30 September 2021 (2020: loss of £1.9
million). SIS's revenues for such period were £113.4 million (2020: £68.6
million) which were derived from its business of providing integrated
television and data services to Licensed Betting Offices in the UK, Ireland
and overseas. SIS generated an operating profit for this period of £3.0
million, compared to an operating loss of £2.4 million in the comparable
period for 2020.
CMG currently has cash reserves of approximately £0.2 million which is
sufficient for its present needs.
Set out below is an overview of the activities of SIS's key divisions for the
period under review.
SIS - UK and Ireland Retail
SIS continues to provide a core service including Racecourse Media Group
horseracing, the SIS British Greyhound Service, Irish Horseracing, Chelmsford
City Horseracing, 49's and International Horseracing to almost the entire UK
and Irish retail market, including all the major UK bookmaking groups and the
majority of the independent market.
As previously reported, in June 2021 SIS extended its rights agreement with
Racecourse Media Group for UK Retail Horseracing rights for a further 3 years
through to March 2026 and has already secured two extended contracts for major
customers of this content.
In the period, SIS has secured renewed contracts for over 98% of its UK and
Irish Independent Retail Bookmaker customers whose contracts were scheduled to
expire.
Additionally, SIS supplies further content and services to its UK and Irish
retail customers to cover early morning and evening products and has renewed
several existing arrangements.
SIS - International & Online
SIS has seen continued growth in both existing customer revenues and its
customer base for its 24/7 racing channels covering horseracing, greyhound
racing, virtual racing and mixed channels and has improved the user
experience. SIS now has over 50 channels with customers designed to maximise
betting opportunities for international retail and online operators and has
signed-up 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.
The numbers products online, operated under the 49's brand, has grown
significantly in the period, driven by a combination of increased customers
and an expanded product range, and complemented by the upgrade of the
49s.co.uk website which has driven affiliates revenue.
The SIS Competitive Gaming (e-sports) service, which was launched during
lockdown in May 2020, has continued to scale the number of events created and
increase revenues with new customers onboarding in the period. The business
subsequently launched an eFootball title service in December 2021
In June 2021, SIS completed an initial investment in, and long-term
partnership arrangement with, Racelab Pty Limited, a racing data science
company in Australia, which adds a range of market leading products across the
SIS portfolio of international horse and greyhound racing which has expanded
the range of trading products available for online customers internationally
and in the UK.
India
An arbitration award was made in July 2020 which the respondent has paid into
court. These funds are now subject to appeals in the Delhi High Court by both
parties: SIS continues to pursue claims disallowed by the arbitrators whilst
the respondent attempts to nullify the award in its entirety. The overall
outcome therefore remains uncertain.
The legal and associated costs relating to this claim have been significantly
reduced but are still impacting SIS's profits.
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. The Court of
Appeal:
(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.
The Court of Appeal was concerned only with the appeals on the liability
findings and consequently made no ruling as to damages.
SIS has applied to the Supreme Court and has been granted an appeal hearing
which is currently expected to be held in the summer of 2022.
Current Trading and Outlook
Following the relaxation of COVID-19 restrictions in May 2021, SIS's UK and
Irish retail business has returned to normal operations whilst the Digital
business has continued to operate at levels higher than pre-COVID-19 and has
seen significant growth in the customer base. Additionally, the business has
continued to scale its latest products of Competitive Gaming (e-sports) and
Numbers draws.
SIS's profitability for its current financial year to 31 March 2022 is
anticipated to see a significant rebound and SIS's management expects the
company to make a profit for the year as a whole in excess of its budget.
SIS's cash position has returned to approximately £58m as at 28 February 2022
and its working capital position has returned to more normal levels.
As a result of the COVID-19 uncertainty, SIS has deferred any dividend this
reporting period and will next consider a dividend later in 2022.
CMG operates at a very low level of overheads and the directors consider that
it has sufficient working capital for its current needs.
Michael Rosenberg OBE
Chairman
29 March 2022
Consolidated interim statement of comprehensive income
Notes 6 months to 31 December 2021 6 months to 31 December 2020 12 months to 30 June 2021
£ £ £
Unaudited Unaudited Audited
Revenue 12,500 12,500 25,000
Cost of sales - - -
Gross profit 12,500 12,500 25,000
Administrative expenses (60,049) (49,424) (130,029)
Operating loss (47,549) (36,924) (105,029)
Financial income 9 13 23
Net financial income 9 13 23
Share of profit/(loss) of equity-accounted associate 3 497,890 (384,303) (1,470,048)
Profit/(loss) before taxation 450,350 (421,214) (1,575,054)
Taxation - (4,934) (4,934)
Profit/(loss) for the period 450,350 (426,148) (1,579,988)
Share of other comprehensive profit of associate - - (188,352)
Total comprehensive income/(loss) for the period 450,350 (426,148) (1,768,340)
Attributable to equity holders of the company 450,350 (426,148) (1,768,340)
Earnings/(loss) per share: 4
Basic 2.14p (2.03p) (7.51p)
Diluted 2.14p (2.03p) (7.51p)
Consolidated interim statement of financial position
Notes 31 December 31 December 30 June
2021 2020 2021
£ £ £
Unaudited Unaudited Audited
Assets
Non-current assets
Investment in associate 3 11,314,470 12,090,677 10,816,580
11,314,470 12,090,677 10,816,580
Current assets
Trade and other receivables 40,976 35,734 57,312
Cash and cash equivalents 165,849 260,020 167,830
206,825 295,754 225,142
Total assets 11,521,295 12,386,431 11,041,722
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 6,235,910 7,127,752 5,785,560
11,452,903 12,344,745 11,002,553
Current liabilities
Trade and other payables 68,392 41,686 39,169
68,392 41,686 39,169
Total equity and liabilities 11,521,295 12,386,431 11,041,722
Consolidated interim cash flow statement
6 months 6 months 12 months
to 31 December 2021 to 31 December 2020 to 30
June
£ £ 2021
Unaudited Unaudited
£
Audited
Cash flow from operating activities
Profit / (loss) before taxation 450,350 (421,214) (1,575,054)
Adjustments for:
Share of (profit) / loss from associate (497,890) 384,303 1,470,048
Finance income (9) (13) (23)
Corporation taxes recovered - 34,875 29,941
Net cash outflow from operating activities before changes in working capital (47,549) (2,049) (75,088)
(Increase) / Decrease in trade and other receivables 16,336 (12,802) (29,446)
Increase / (Decrease) in trade and other payables 29,223 4,204 1,667
Net cash outflow used in operating activities (1,990) (10,647) (102,847)
Investing activities
Interest received 9 13 23
Net cash inflow from investing activities 9 13 23
Net movement in cash and cash equivalents in the period (1,981) (10,634) (102,824)
Cash and cash equivalents at the beginning of the period 167,830 270,654 270,654
Cash and cash equivalents at the end of the period 165,849 260,020 167,830
Consolidated interim statement of changes in equity
Share Capital redemption reserve Merger Retained Total shareholders equity
capital £ reserve surplus/ £
Unaudited (deficit) Unaudited
£ £ £
Unaudited Unaudited Unaudited
At 1 July 2020 2,103,202 711,117 2,402,674 7,553,900 12,770,893
Loss for the 6 month period to 31 December 2020 - - - (426,148) (426,148)
Dividend paid to company shareholders - - - - -
Total comprehensive loss for the period - - - (426,148) (426,148)
At 31 December 2020 2,103,202 711,117 2,402,674 7,127,752 12,344,745
Loss for the 6 month period to 30 June 2021 - - - (1,153,840) (1,153,840)
Share of other comprehensive profit of associate - - - (188,352) (188,352)
Total comprehensive loss for the period - - - (1,342,192) (1,342,192)
At 30 June 2021 2,103,202 711,117 2,402,674 5,785,560 11,002,553
Share Capital redemption reserve Merger Retained Total
capital £ reserve surplus/ shareholders
Unaudited (deficit) equity
£ £ £ £
Unaudited Unaudited Unaudited Unaudited
At 1 July 2021 2,103,202 711,117 2,402,674 5,785,560 11,002,553
Profit for the 6 month period to 31 December 2021 - - - 450,350 450,350
Dividend paid to company shareholders - - - - -
Total comprehensive profit for the period - - - 450,350 450,350
At 31 December 2021 2,103,202 711,117 2,402,674 6,235,910 11,452,903
Notes to the interim financial statements
1. Corporate information
CMG is a company incorporated in England and Wales and quoted on the AIM
market operated by London Stock Exchange plc.
2. Basis of preparation
These unaudited consolidated interim financial statements cover the six month
period from 1 July 2021 to 31 December 2021 including the financial results of
Sports Information Services (Holdings) Limited ("SIS") for the six month
period to 30 September 2021.
These consolidated interim financial statements of the Company and its
subsidiaries (the "Group") for the six months ended 31 December 2021 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 these unaudited interim
financial statements are consistent with the accounting policies adopted in
the Group's financial statements for the year ended 30 June 2021 and will
remain so for the year ending 30 June 2022.
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 2021, 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 applied the following new financial reporting standards for the
first time in preparing its most recent financial statements for the year
ended 30 June 2021. There has been no material impact on the Group's financial
statements
§ IFRS 16: Covid-19 Related Rent Concessions
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 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 2023)
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
£
Cost
At 1 July 2021 10,816,580
Additions - share of profits 497,890
At 31 December 2021 11,314,470
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 Board has reviewed its valuation of the Company's investment in SIS as at
31 December 2021 and has, in line with the Group's accounting policies,
increased the value of the investment by the amount of its share of profits
for the period. As a result, the investment is carried at a value equal to its
20.54% interest in SIS's net assets of £55.09m.
Share of profit of associate* 30 September 31 December 2021 31 December 2020 30 June
2021 2021
SIS Total CMG share CMG share CMG share
£'000 £'000 £'000 £'000
Revenue:
SIS Betting Services 113,355 23,283 14,091 26,724
Total revenue 113,355 23,283 14,091 26,724
Operating profit/(loss) from ongoing operations 2,997 616 (488) (1,832)
Net interest receivable / (payable) (3) (1) 13 63
Profit/(loss) before tax 2,994 615 (475) (1,769)
Taxation (570) (117) 90 299
Share of (loss)/income after taxation 2,424 498 (384) (1,470)
Net income from associate 2,424 498 (384) (1,470)
Other comprehensive income
Actuarial (loss) /gain - - - (289)
Deferred tax - - - 101
- - - (188)
Share of gross assets and liabilities of associate
Gross assets 112,308 23,068 25,784 20,629
Gross liabilities (57,223) (11,754) (13,693) (9,812)
Net equity 55,085 11,314 12,091 10,817
* - The period covered by the associate's accounts is the six months to 30
September 2021. The revenues have been stated excluding internal revenues.
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.
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 6 months to 12 months to 30 June
31 December 2021 31 December 2020 2021
£ £ £
Basic and Diluted
Earnings/(loss) per share - pence 2.14p (2.03p) (7.51p)
Profit/(loss) attributable to equity shareholders 450,350 (426,148) (1,579,988)
Weighted average number of Shares in issue 21,032,030 21,032,030 21,032,030
- ENDS -
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