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

 

£

Unaudited

6 months to 31 December 2022

 

£

Unaudited

12 months to 30 June 2023

 

£

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

2023

 

£

Unaudited

  31 December

2022

 

£

Unaudited

30 June

2023

 

£

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

to 31 December 2023

 

£

Unaudited

6 months

to 31 December 2022

 

£

Unaudited

12 months

to 30

June

2023

 

£

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

 

£

Unaudited

Capital redemption reserve

£

Unaudited

Merger

 reserve

 

£

Unaudited

Retained

surplus/

(deficit)

£

Unaudited

Total shareholders equity

 £

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

 

£

Unaudited

Capital redemption reserve

£

Unaudited

Merger

 reserve

 

£

Unaudited

Retained

surplus/

(deficit)

£

Unaudited

Total

shareholders

equity

 £

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

2023


31 December 2023

31 December 2022

30 June

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

31 December 2023

£

6 months to

31 December 2022

£

12 months to 30 June

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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