REG - Catalyst Media Group - Interim Results
30/03/2023 07:00
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RNS Number : 6785U Catalyst Media Group PLC 30 March 2023
30 March 2023
Catalyst Media Group Plc
("CMG", "Catalyst" or the "Company")
Interim Results for the Six Months Ended 31 December 2022
The Board of CMG (AIM: CMX) is pleased to announce the Company's unaudited
interim results for the six months ended 31 December 2022.
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 2022
· CMG profit after taxation of £0.30 million (2021: £0.45
million)
· Earnings per share of 1.45p (2021: 2.14p)
· Net asset value per share of 170.4p (2021: 54.5p)
· For the six months to 30 September 2022, SIS achieved
- Revenues of £125.8 million (2021: £113.4 million)
- Operating profit of £1.9 million (2021: £3.0 million)
- Profit after tax on ordinary activities of £1.8 million (2021: profit
of £2.4 million)
· On 18 November 2022, SIS declared a dividend of £4.4 million
of which £0.9 million was received by CMG.
· CMG has not declared nor paid any dividends during the
reporting period or during the prior period, but a dividend of £0.7m (3.3p
per ordinary share) was declared and paid by CMG, post the reporting period
end, in January and February 2023 respectively.
Current Trading and Outlook
SIS's trading remains robust and its management continues to pursue and win
new business opportunities both in terms of content acquisition, most recently
securing new rights for Australian Horseracing from Victorian Thoroughbred
Racing and Racing South Australia, and new customers, with the most recent
deals announced being with BetGo+ and Kiron Interactive.
SIS has also recently launched the first of its esports offerings in New
Jersey and Colorado which marks another significant step in the further
geographic diversification of this particular business line.
SIS has advised CMG that it expects to close its financial year to 31 March
2023 with increased revenue and profit before tax year-on-year.
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 by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
Chairman's Statement
For the six-month period ended 31 December 2022, the Company achieved a net
profit after taxation of £0.30 million (2021: £0.45 million).
Net assets as at 31 December 2022 were £35.8 million (30 June 2022: £35.5
million). Net cash as at 31 December 2022 was approximately £0.9 million (30
June 2022: £0.1 million).
CMG's main asset remains its 20.54% stake in SIS and, in November 2022, the
Company received a dividend of £0.9 million from SIS. The value of CMG's
investment in SIS has reduced from approximately £35.4 million to
approximately £34.9 million, reflecting the impact of the dividend receipt
offset by CMG's share of the profits achieved by SIS in the six months to 30
September 2022. As a result, CMG's net assets per share as at 31 December 2022
were 170.4p (2021: 54.5p). 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 £1.8 million
after tax for its six-month period to 30 September 2022 (2021: £2.4 million).
SIS's revenues for such period were £125.8 million (2021: £113.4 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 £1.9 million, compared to an
operating profit of £3.0 million in the comparable period for 2021.
Following the declaration and payment of a £0.7m dividend (3.3p per ordinary
share) in January and February 2023 respectively, CMG currently has cash
reserves of approximately £0.2 million which is sufficient for its present
requirements.
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, 49s and International Horseracing to almost the entire UK
and Irish retail market, including all of the major UK bookmaking groups and
the majority of the independent market.
In advance of the scheduled renewal dates SIS has recently renewed, on a
long-term basis, a combination of production, distribution, and content deals
with 80% of the major bookmaker Licensed Betting Operator ("LBO") market and
is in advanced stage negotiations with the remainder of the major bookmaker
LBO market. This is in addition to the majority of the Independent Retail
Bookmakers who are already signed up to SIS's services through to 2024.
SIS has recently secured additional content for its UK Retail and Digital
customers in the form of South African horseracing from 4Racing, Italian
horseracing and Australian horseracing content from both Victorian
Thoroughbred Racing and Racing South Australia.
SIS - International & Online
SIS has seen continued growth in both existing customer revenues and its
customer base for its online racing content through both its 24/7 racing
channels and direct content distribution. SIS has over 140 live feeds to
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.
In November 2022, SIS exercised its option to acquire a further 25% interest
in Racelab Pty Limited ("Racelab"), a racing data science company in
Australia, thereby increasing its total stake to 50%. Racelab provides a range
of market leading products across the SIS portfolio of international horse and
greyhound racing.
SIS - Non-racing content
Numbers products online, operated under the 49's brand, have grown
significantly in the period, driven by a combination of increased customers
and an expanded product range, and complemented by an upgrade of the 49s.co.uk
website which has driven affiliates revenue. In December 2022 bet365 launched
a new online draw product, Lotto365, powered by SIS's 49s business which
brought the total number of events delivered under the 49's brand to over
300,000.
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 during the period. The
business has three titles focused around eBasketball, eFootball and Counter
Strike: Global Offensive (CS: GO), a traditional e-sports product, and creates
over 100,000 events per annum with the ability to scale further. SIS has also
recently launched the first of its esports offerings in New Jersey and
Colorado which marks another significant step in the further geographic
diversification of this particular business line.
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.
SIS Current Trading and Outlook
SIS's trading remains robust, and its management continues to pursue and win
new business opportunities both in terms of content acquisition, most recently
securing new rights for Australian Horseracing from Victorian Thoroughbred
Racing and Racing South Australia and new customers, with the most recent
deals announced being with BetGo+ and Kiron Interactive.
SIS has advised CMG that it expects to close its financial year to 31 March
2023 with increased revenue and profit before tax year-on-year
SIS's cash position as of 28 February 2023 was approximately £51m.
As announced previously by the Company, in November 2022 SIS engaged Oakvale
Capital LLP ("Oakvale Capital") to review strategic options for the SIS
business and this review is ongoing. The outcome of this review process may
include various courses of action for the future of the business and once the
SIS board has reached any conclusions an appropriate announcement will be made
by CMG.
CMG Outlook
The Board of CMG notes the positive report from SIS that its revenues and
profits are expected to show increased growth for its financial year ending 31
March 2023 compared to the previous year. We look forward to the outcome of
the review currently being undertaken by Oakvale Capital. Meanwhile overheads
for CMG continue to remain at a very low level as in previous years.
Michael Rosenberg OBE
Chairman
29 March 2023
Consolidated interim statement of comprehensive income
Notes 6 months to 31 December 2022 6 months to 31 December 2021 12 months to 30 June 2022
£ £ £
Unaudited Unaudited Audited
Revenue 12,500 12,500 25,000
Cost of sales - - -
Gross profit 12,500 12,500 25,000
Administrative expenses (77,355) (60,049) (137,859)
Operating loss (64,855) (47,549) (112,859)
Financial income 874 9 36
Net financial income 874 9 36
Share of profit of equity-accounted associate 3 368,077 497,890 1,153,937
Reversal of impairment of equity-accounted associate - - 23,391,701
Profit before taxation 304,096 450,350 24,432,815
Taxation - - 23,957
Profit for the period 304,096 450,350 24,456,772
Share of other comprehensive profit of associate - - 67,782
Total comprehensive income for the period 304,096 450,350 24,524,554
Attributable to equity holders of the Company 304,096 450,350 24,524,554
Earnings per share: 4
Basic 1.45p 2.14p 116.28p
Diluted 1.45p 2.14p 116.28p
Consolidated interim statement of financial position
Notes 31 December 31 December 30 June
2022 2021 2022
£ £ £
Unaudited Unaudited Audited
Assets
Non-current assets
Investment in associate 3 34,894,534 11,314,470 35,430,000
34,894,534 11,314,470 35,430,000
Current assets
Trade and other receivables 49,555 40,976 56,953
Cash and cash equivalents 936,582 165,849 93,011
986,137 206,825 149,964
Total assets 35,880,671 11,521,295 35,579,964
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 30,614,210 6,235,910 30,310,114
35,831,203 11,452,903 35,527,107
Current liabilities
Trade and other payables 49,468 68,392 52,857
49,468 68,392 52,857
Total equity and liabilities 35,880,671 11,521,295 35,579,964
Consolidated interim cash flow statement
6 months 6 months 12 months
to 31 December 2022 to 31 December 2021 to 30
June
£ £ 2022
Unaudited Unaudited
£
Audited
Cash flow from operating activities
Profit before taxation 304,096 450,350 24,432,815
Adjustments for:
Share of (profit) from associate (368,077) (497,890) (1,153,937)
Reversal of impairment in associate - - (23,391,701)
Finance income (874) (9) (36)
Corporation taxes recovered 17,904 - -
Net cash outflow from operating activities before changes in working capital (46,951) (47,549) (112,859)
(Increase) / Decrease in trade and other receivables (10,506) 16,336 24,316
Increase / (Decrease) in trade and other payables (3,389) 29,223 13,688
Net cash outflow used in operating activities (60,846) (1,990) (74,855)
Investing activities
Dividend received 903,543 - -
Interest received 874 9 36
Net cash inflow from investing activities 904,417 9 36
Net movement in cash and cash equivalents in the period 843,571 (1,981) (74,819)
Cash and cash equivalents at the beginning of the period 93,011 167,830 167,830
Cash and cash equivalents at the end of the period 936,582 165,849 93,011
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 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 the Company's 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
Profit for the 6 month period to 30 June 2022 - - - 24,006,422 24,006,422
Share of other comprehensive profit of associate - - - 67,782 67,782
Total comprehensive profit for the period - - - 24,074,204 24,074,204
At 30 June 2022 2,103,202 711,117 2,402,674 30,310,114 35,527,107
Share Capital redemption reserve Merger Retained Total
capital £ reserve surplus/ shareholders
Unaudited (deficit) equity
£ £ £ £
Unaudited Unaudited Unaudited Unaudited
At 1 July 2022 2,103,202 711,117 2,402,674 30,310,114 35,527,107
Profit for the 6 month period to 31 December 2022 - - - 304,096 304,096
Dividend paid to the Company's shareholders - - - - -
Total comprehensive profit for the period - - - 304,096 304,096
At 31 December 2022 2,103,202 711,117 2,402,674 30,614,210 35,831,203
Notes to the interim financial statements
1. Corporate information
CMG is a company incorporated in England and Wales and is 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 2022 to 31 December 2022 including the financial results of
Sports Information Services (Holdings) Limited ("SIS") for its six month
period to 30 September 2022.
These consolidated interim financial statements of the Company and its
subsidiaries (the "Group") for the six months ended 31 December 2022 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 2022 and will
remain so for the year ending 30 June 2023.
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 2022, 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, including SIS, has applied no new financial reporting standards for
the first time in preparing its financial statements for the six month period
ended 31 December 2022.
Standards, interpretations and amendments to published standards not yet
effective
At the date of authorisation of these consolidated interim 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 interim
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 2022 35,430,000
Additions - share of profits 368,077
Dividends received (903,543)
At 31 December 2022 34,894,534
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 2022 and has, in line with the Group's accounting policies,
decreased the value of its investment by the amount of its share of profits
for the period, less the value of the dividend received. As a result, the
investment is now carried at a value of £34.9m.
Share of profit of associate* 30 September 31 December 2022 31 December 2021 30 June
2022 2022
SIS Total CMG share CMG share CMG share
£'000 £'000 £'000 £'000
Revenue:
SIS Betting Services 125,746 25,828 23,283 44,849
Total revenue 125,746 25,828 23,283 44,849
Operating profit/(loss) from ongoing operations 1,929 396 616 1,430
Net interest receivable / (payable) 283 58 (1) -
Profit/(loss) before tax 2,212 454 615 1,430
Taxation (420) (86) (117) (276)
Share of income/(loss) after taxation 1,792 368 498 1,154
Net income from associate 1,792 368 498 1,154
Other comprehensive income
Actuarial gain/(loss) - - - 104
Deferred tax - - - (36)
- - - 68
Share of gross assets and liabilities of associate
Gross assets 131,315 26,972 23,068 26,005
Gross liabilities (69,212) (14,216) (11,754) (13,617)
Net equity 62,103 12,756 11,314 12,388
* - The period covered by the associate's accounts is for the six months to 30
September 2022. The revenues have been stated excluding internal revenues.
4. Earnings 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 2022 31 December 2021 2022
£ £ £
Basic and Diluted
Earnings per share - pence 1.45p 2.14p 116.28p
Profit attributable to equity shareholders 304,096 450,350 24,456,772
Weighted average number of Shares in issue 21,032,030 21,032,030 21,032,030
- ENDS -
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