REG - Catalyst Media Group - Interim Results
26/03/2024 07:00
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RNS Number : 1996I Catalyst Media Group PLC 26 March 2024
26 March 2024
Catalyst Media Group Plc
("CMG", "Catalyst" or the "Company")
Interim Results for the Six Months Ended 31 December 2023
The Board of CMG (AIM: CMX) is pleased to announce the Company's unaudited
interim results for the six months ended 31 December 2023.
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 2023
· CMG profit after taxation of £0.77 million (2022: £0.30
million)
· Earnings per share of 3.64p (2022: 1.45p)
· Following payment of a 27p dividend in November 2023, net
asset value per share of 151.6p (2022: 170.4p) at the end of the reporting
period
· For the six months to 30 September 2023, SIS achieved
- Revenues of £133.5 million (2022: £125.7 million)
- Operating profit of £4.6 million (2022: £1.9 million)
- Profit after tax on ordinary activities of £4.0 million (2022: profit
of £1.8 million)
· On 31 October 2023, the Company received its £6.16 million
share of an ordinary and special dividend paid by SIS and on 21 November 2023
paid an interim dividend of approximately £5.68 million, equating to 27 pence
per CMG ordinary share.
SIS's 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 Korean horseracing, and new customer distribution
deals recently announced with Genius Sports Limited and EveryMatrix for
Competitive Gaming.
In February 2024, SIS launched fixed odds horseracing in Colorado USA with
bet365 following approval by state authorities. The launch followed the
previous launch of Competitive Gaming in three states including Colorado in
calendar year 2023.
SIS has advised that on 12 March 2024 the board of Racelab Pty Limited, a
company based in Australia in which SIS has a 50% stake, appointed a Voluntary
Administrator following its failure to secure further funding. At this stage,
SIS management are unclear of the likely outcome however it is unlikely to
impact SIS's trading results although will result in a write-down of the
investment in its financial year to 31 March 2024.
Prior to any investment write-down, SIS has advised CMG that it expects to
close its financial year to 31 March 2024 with increased revenue and profit
before tax year-on-year, but noted the likely impact on next year's
profitability of the closure of a particular customer.
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 Regulation
(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 2023, the Company achieved a net
profit after taxation of £0.77 million (2022: £0.30 million).
Net assets as at 31 December 2023 were £31.9 million (30 June 2023: £36.8
million). Net cash as at 31 December 2023 was approximately £0.6 million (30
June 2023: £0.2 million).
CMG's main asset remains its 20.54% stake in SIS and, in October 2023, the
Company received its £6.16 million share of an ordinary and special dividend
from SIS. The value of CMG's investment in SIS has reduced from approximately
£36.6 million as at 30 June 2023 to approximately £31.3 million as at 31
December 2023, reflecting the impact of such dividend receipt offset by CMG's
share of the profits achieved by SIS in the six months to 30 September 2023.
As a result, CMG's net assets per share as at 31 December 2023 were 151.6p
(2022: 170.4p). 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 £4.0 million
after tax for its six-month period to 30 September 2023 (2022: £1.8 million).
SIS's revenues for such period were £133.5 million (2022: £125.7 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 £4.6 million, compared to an
operating profit of £1.9 million in the comparable period for 2022.
CMG currently has cash reserves of approximately £0.5 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 its 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.
SIS supplies its retail services, production, distribution and content, to the
major retail brands on recently-renewed long term agreements.
In June 2023, SIS strengthened its long-term position by securing a five-year
renewal to the Horse Racing Ireland and Association of Irish Racecourses'
worldwide Fixed Odds rights.
SIS - International & Online
SIS has continued to expand its international reach both in terms of customers
and rights agreements. New racing rights have been secured for horseracing
from South Africa, Australia, Italy, Korea and Poland and a number of existing
international content agreements have been renewed.
SIS has over 150 live feeds to customers designed to maximise betting
opportunities for international retail and online operators and has
signed 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.
SIS has seen its new US subsidiary, SIS Content Services Inc., secure licences
to supply elements of its content in five states and has a number of other
state applications in progress and went live with Fixed Odds horseracing in
February 2024.
SIS - Non-racing content
The SIS Competitive Gaming (e-sports) service, has seen customer growth in the
year and is now focussing on two sports related titles, e-football, and
e-basketball, following feedback from customers. It provides around 100,000
unique events per annum with plans underway to increase this number further.
The events are supplied to customers in a number of territories worldwide
including three US states where SIS is currently licenced. In February 2024,
SIS signed distribution deals with Genius Sports Limited and EveryMatrix which
will provide worldwide distribution of the Competitive Gaming events.
49's Ltd, the branded numbers business, has served to expand SIS's product
offering following its acquisition in 2020 with SIS's product range now
including the original 49's draw, Fast 15's and 39's, plus upgraded virtual
horseracing. In SIS's financial year to 31 March 2023, it also launched a
bespoke draw product, Lotto365, for bet365. Accordingly, the business now
produces over 500,000 draws per annum.
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's 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 Korean horseracing, and new customer distribution
deals recently announced with Genius Sports Limited and EveryMatrix for
Competitive Gaming.
In February 2024, SIS launched fixed odds horseracing in Colorado USA with
bet365 following approval by state authorities, the launch followed the
launches in calendar year 2023 of Competitive Gaming in three states including
Colorado.
SIS has advised that on 12 March 2024 the board of Racelab Pty Limited, a
company based in Australia in which SIS has a 50% stake, appointed a Voluntary
Administrator following its failure to secure further funding. At this stage,
SIS is unclear of the likely outcome however it is unlikely to impact SIS's
trading results although will result in a write-down of the investment in its
financial year to 31 March 2024.
Prior to any investment write-down, SIS has advised CMG that it expects to
close its financial year to 31 March 2024 with increased revenue and profit
before tax year-on-year.
SIS's cash position as of 11 March 2024 was approximately £13.1 million.
In March 2024, SIS also noted that a particular customer, had announced that
it intends to cease trading on 31 March 2024. SIS is continuing discussions
with such customer but it is likely to impact profitability in SIS's next
financial year.
Following its total dividend distribution in October 2023, SIS secured an
initial £35 million banking facility to provide funds for working capital and
to finance growth, including acquisition financing, and the SIS Board
continues to support the company's long term business strategy. Such banking
facility can potentially be increased to £50 million.
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 2024 compared to the previous year, subject to any one-off investment
write-downs, but also notes the likely impact on next year's profitability of
the closure of a customer. Meanwhile, overheads for CMG continue to remain at
a very low level as in previous years.
Michael Rosenberg OBE
Chairman
25 March 2024
Consolidated interim statement of comprehensive income
Notes 6 months to 31 December 2023 6 months to 31 December 2022 12 months to 30 June 2023
£ £ £
Unaudited Unaudited Audited
Revenue 12,500 12,500 25,000
Cost of sales - - -
Gross profit 12,500 12,500 25,000
Administrative expenses (96,739) (77,355) (179,447)
Operating loss (84,239) (64,855) (154,477)
Financial income 6,134 874 2,243
Net financial income 6,134 874 2,243
Share of profit of equity-accounted associate 3 829,405 368,077 880,174
Reversal of impairment of equity-accounted associate - - 1,856,276
Profit before taxation 751,300 304,096 2,584,246
Taxation 15,300 - 30,300
Profit for the period 766,600 304,096 2,614,546
Share of other comprehensive profit of associate - - (651,323)
Total comprehensive income for the period 766,600 304,096 1,963,223
Attributable to equity holders of the Company 766,600 304,096 1,963,223
Earnings per share: 4
Basic 3.64p 1.45p 12.43p
Diluted 3.64p 1.45p 12.43p
Consolidated interim statement of financial position
Notes 31 December 31 December 30 June
2023 2022 2023
£ £ £
Unaudited Unaudited Audited
Assets
Non-current assets
Investment in associate 3 31,279,687 34,894,534 36,611,584
31,279,687 34,894,534 36,611,584
Current assets
Trade and other receivables 100,834 49,555 78,668
Cash and cash equivalents 608,166 936,582 174,364
709,000 986,137 253,032
Total assets 31,988,687 35,880,671 36,864,616
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 26,667,161 30,614,210 31,579,260
31,884,154 35,831,203 36,796,253
Current liabilities
Trade and other payables 104,533 49,468 68,363
104,533 49,468 68,363
Total equity and liabilities 31,988,687 35,880,671 36,864,616
Consolidated interim cash flow statement
6 months 6 months 12 months
to 31 December 2023 to 31 December 2022 to 30
June
£ £ 2023
Unaudited Unaudited
£
Audited
Cash flow from operating activities
Profit before taxation 751,300 304,096 2,584,246
Adjustments for:
Share of (profit) from associate (829,405) (368,077) (880,174)
Reversal of impairment in associate - - (1,856,276)
Finance income (6,134) (874) (2,243)
Corporation taxes recovered - 17,904 17,904
Net cash outflow from operating activities before changes in working capital (84,239) (46,951) (136,543)
(Increase) / Decrease in trade and other receivables (6,867) (10,506) (9,318)
Increase / (Decrease) in trade and other payables 36,171 (3,389) 15,505
Net cash outflow used in operating activities (54,935) (60,846) (130,356)
Investing activities
Dividend received 6,161,302 903,543 903,543
Interest received 6,134 874 2,243
Net cash inflow from investing activities 6,167,436 904,417 905,786
Financing activities
Dividends paid (5,678,699) - (694,077)
Net cash outflow used in financing activities (5,678,699) - (694,077)
Net movement in cash and cash equivalents in the period 433,802 843,571 81,353
Cash and cash equivalents at the beginning of the period 174,364 93,011 93,011
Cash and cash equivalents at the end of the period 608,166 936,582 174,364
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 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
Total comprehensive profit for the period - - - 304,096 304,096
Dividend paid to the Company's shareholders - - - - -
At 31 December 2022 2,103,202 711,117 2,402,674 30,614,210 35,831,203
Profit for the 6 month period to 30 June 2023 - - - 2,310,450 2,310,450
Share of other comprehensive profit of associate - - - (651,323) (651,323)
Total comprehensive profit for the period - - - 1,659,127 1,659,127
Dividend paid to the Company's shareholders - - - (694,077) (694,077)
At 30 June 2023 2,103,202 711,117 2,402,674 31,579,260 36,796,253
Share Capital redemption reserve Merger Retained Total
capital £ reserve surplus/ shareholders
Unaudited (deficit) equity
£ £ £ £
Unaudited Unaudited Unaudited Unaudited
At 1 July 2023 2,103,202 711,117 2,402,674 31,579,260 36,796,253
Profit for the 6 month period to 31 December 2023 - - - 766,600 766,600
Total comprehensive profit for the period - - - 766,600 766,600
Dividend paid to the Company's shareholders - - - (5,678,699) (5,678,699)
At 31 December 2023 2,103,202 711,117 2,402,674 26,667,161 31,884,154
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 2023 to 31 December 2023 including the financial results of
Sports Information Services (Holdings) Limited ("SIS") for its six month
period to 30 September 2023.
These consolidated interim financial statements of the Company and its
subsidiaries (the "Group") for the six months ended 31 December 2023 have been
prepared in accordance with accepted International Financial Reporting
Standards (IFRSs), International Accounting Standards (IAS) and International
Financial Reporting Interpretations Committee (IFRIC) interpretations
(collectively "IFRSs") as adopted for use in the United Kingdom and as issued
by the International Accounting Standards Board and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS.
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 2023 and will
remain so for the year ending 30 June 2024.
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 2023, 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 the following new financial reporting
standards for the first time in preparing its financial statements for the six
month period ended 31 December 2023. All were effective as of 1 January 2023:
§ Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of
Financial Statements and IFRS Practice Statement 2 Making Materiality
Judgements)
§ Definition of Accounting Estimates (Amendments to IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors)
§ Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12 Income Taxes)
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 standards and
interpretations which are effective for annual accounting periods beginning on
or after the stated effective date. These standards are not effective for,
and have not been applied in, the preparation of these consolidated interim
financial statements:
§ General Requirements for Disclosure of Sustainability-related Financial
Information and Climate-related Disclosures (Amendments to IFRS S1 and S2)
(effective as of 1 January 2024)
§ Non-current Liabilities with Covenants and Classification of Liabilities as
Current or Non-current (Amendments to IAS 1) (effective as of 1 January 2024)
§ Lease Liability in a Sale and Leaseback (Amendments to IAS 16) (effective
as of 1 January 2024)
§ Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) (effective
as of 1 January 2024); and
§ Lack of Exchangeability (Amendments to IAS 21) (effective as of 1 January
2025)
The Directors anticipate that the adoption of these standards 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 2023 36,611,584
Additions - share of profits 829,405
Dividends received (6,161,302)
At 31 December 2023 31,279,687
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, whilst
entitled to appoint a director and alternate director to the SIS board,
currently maintains observer rights. 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 2023 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 approximately £31.3m.
Share of profit of associate* 30 September 31 December 2023 31 December 2022 30 June
2023 2023
SIS Total CMG share CMG share CMG share
£'000 £'000 £'000 £'000
Revenue:
SIS Betting Services 133,458 27,412 25,828 47,396
Total revenue 133,458 27,412 25,828 47,396
Operating profit/(loss) from ongoing operations 4,583 941 396 1,108
Group's share of loss in associate - - - (33)
Net interest receivable / (payable) 845 174 58 275
Profit/(loss) before tax 5,428 1,115 454 1,350
Taxation (1,390) (286) (86) (347)
Share of income/(loss) after taxation 4,038 829 368 1,003
Net income from associate 4,038 829 368 1,003
IFRS 9 expected credit loss provision - - - (123)
Adjusted net income from associate 4,038 829 368 880
Other comprehensive income
Actuarial gain/(loss) - - - (1,498)
Deferred tax - - - 524
Acquisition of a subsidiary and revaluation loss - - - 322
Total other comprehensive income - - - (652)
Share of gross assets and liabilities of associate
Gross assets 123,591 25,386 26,972 26,774
Gross liabilities (62,922) (12,924) (14,216) (14,938)
Net equity 60,669 12,462 12,756 11,836
* - The period covered by the associate's accounts is for the six months to 30
September 2023. 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 2023 31 December 2022 2023
£ £ £
Basic and Diluted
Earnings per share - pence 3.64p 1.45p 12.43p
Profit attributable to equity shareholders 766,600 304,096 1,963,223
Weighted average number of Shares in issue 21,032,030 21,032,030 21,032,030
- ENDS -
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