TIDMCHS
RNS Number : 5357M
Chrysalis PLC
26 May 2010
CHRYSALIS PLC
Interim results for the six months ended 31 March 2010(Unaudited)
+-------------------------------------+--------------+--------------+
| | Six months | Six months |
| | ended | ended |
| | 31 March | 31 March |
| | 2010 | 2009 |
| | GBP'm | GBP'm |
+-------------------------------------+--------------+--------------+
| | | |
+-------------------------------------+--------------+--------------+
| Revenue | 32.7 | 31.2 |
+-------------------------------------+--------------+--------------+
| Consolidated NPS1 | 7.4 | 6.5 |
+-------------------------------------+--------------+--------------+
| Normalised operating profit2 | 2.6 | 1.4 |
+-------------------------------------+--------------+--------------+
| Normalised profit before tax2 | - | 0.5 |
+-------------------------------------+--------------+--------------+
| Normalised (loss)/earnings per | (0.12)p | 1.03p |
| share (pence) | | |
+-------------------------------------+--------------+--------------+
| | | |
+-------------------------------------+--------------+--------------+
| Operating profit | 2.3 | 2.0 |
+-------------------------------------+--------------+--------------+
| Loss before tax3 | (0.5) | (2.6) |
+-------------------------------------+--------------+--------------+
| Basic loss per share (pence) | (0.79)p | (3.45)p |
+-------------------------------------+--------------+--------------+
| | | |
+-------------------------------------+--------------+--------------+
| Net debt | 15.8 | 10.0 |
+-------------------------------------+--------------+--------------+
Results Highlights
· Overall trading results were ahead of Board expectations, despite the
difficult economic conditions, with normalised operating profit up 86% to
GBP2.6m from GBP1.4m.
· Chrysalis Music performed ahead of expectations with consolidated music
NPS up 13.8% to GBP7.4m from GBP6.5m, up 15.4% to GBP7.5m from GBP6.5m on a
constant currency basis, comprising:
- Publishing up 1.6% to GBP6.2m from GBP6.1m, up 3.3% on a constant currency
basis4;
- Non-Publishing up by GBP0.8m from GBP0.4m to GBP1.2m on a reported and
constant currency basis.
· Publishing attained historic chart and airplay success with consecutive
US no. 1 hits co-written and produced by our writers Fraser T Smith ("Break My
Heart" by Taio Cruz) and Pendulum's Rob Swire ("Rude Boy" by Rihanna). Robbie
Williams also attained chart success with "You Know Me" and "Morning Sun",
co-written by our writers Soul Mekanik, with album sales reaching 2.5m.
· Non-Publishing delivered excellent results driven by exceptional
worldwide sales of the re-mastered Beatles album and generated incremental NPS
of GBP0.8m in the period.
· Lasgo Chrysalis performed well, delivering operating profit of GBP1.3m
(six months ended 31 March 2009: GBP1.3m), a strong performance in volatile
markets and against strong comparatives.
· Corporate overhead was lower than the prior period, reflecting the
continued focus on costs. Solid financial position with facility of GBP22.4m
available for further selective catalogue acquisitions and net debt consistent
with prior year end at GBP15.8m.
· Significant developments:
- Property issues resolved with the sale of freehold property at Bramley for
GBP6.8m and surrender of onerous lease with a combined net profit of GBP0.2m;
- Hedge restructure completed to manage ongoing cash interest costs;
- Integration of First State Media Group, acquired on 1 April, on track and
re-branded as Chrysalis One.
· Encouraging start to the remainder of the financial year with chart
success from Laura Marling and Broken Bells, and forthcoming releases from
Pendulum, Estelle, Ray LaMontagne and Cee-Lo Green. Our writers are working
with a number of chart-topping artists - Nerina Pallot (Diana Vickers and Kylie
Minogue), Fraser T Smith (Kylie Minogue and Adele), Dan Wilson (Josh Groban) and
No-id (Richard Ashcroft).
1. Net Publisher's Share (NPS) is the revenue received by a music publisher,
less any royalties that have to be paid to writers, performers and others
receiving a share of royalties.
2. Normalised measures are stated before separately disclosed items. See
notes 2 and 3 to the attached financial information for further details. The
Group believes that the normalised measures provide additional guidance to the
statutory measures of the performance of the business during the period. These
measures are not defined under Adopted IFRS and therefore may not be directly
comparable with other companies adjusted profit measures. It is not intended to
be a substitute for or superior to Adopted IFRS measurements of profit.
3. The loss before tax is operating profit after charging net finance costs of
GBP2.8m, which includes a GBP0.2m charge in respect of the fair value movements
in derivative financial instruments.
4. Constant currency results are calculated by restating current period local
currency results using prior period exchange rates.
Commenting on the results, Jeremy Lascelles, Chief Executive, said:
"Amidst continuing volatility in the record industry, our first half performance
has been pleasing. Our recent search for music publishing catalogues has also
borne fruit, with the acquisition of First State Media Group. This has provided
us with a catalogue of world-class copyrights, guaranteed incremental NPS, and
access to a new group of investors with a strong appetite for investing in music
publishing assets. We have made a very encouraging start to the remainder of
the financial year with successive no.1 singles in the US, and are confident of
building on this with a strong release schedule in the second half."
+-------------------+--------------+--------------+---------------------+
| Enquiries: | | | |
+-------------------+--------------+--------------+---------------------+
| Chrysalis PLC | Jeremy | Group Chief | 020 7465 6170 |
| | Lascelles | Executive | |
+-------------------+--------------+--------------+---------------------+
| | Andy Mollett | Group | 020 7465 6321 |
| | | Finance | |
| | | Director | |
+-------------------+--------------+--------------+---------------------+
| | | | |
+-------------------+--------------+--------------+---------------------+
| Brunswick | Tim | | 020 7404 5959 |
| | Burt/Dania | | |
| | Saidam | | |
+-------------------+--------------+--------------+---------------------+
| | | | |
+-------------------+--------------+--------------+---------------------+
| Analyst Meeting: | 9.30am, 26 | | |
| | May 2010 | | |
+-------------------+--------------+--------------+---------------------+
| | | | |
+-------------------+--------------+--------------+---------------------+
| Venue: | Investec, 2 Gresham Street, London EC2V 7QP |
+-------------------+--------------+--------------+---------------------+
ABOUT CHRYSALIS PLC
Chrysalis PLC is an independent music company. The Group's principal areas of
business comprise: Chrysalis Music Publishing which includes the Group's
international network of music publishing companies, whose purpose it is to
exploit and grow Chrysalis's rich catalogue of music copyrights; Chrysalis Non
Music Publishing, which is made up of The Echo Label, a copyright exploitation
company; Chrysalis Copyrights, the owner of certain Master recordings and
Flatiron Management, an artist management company. Chrysalis PLC also owns
Lasgo Chrysalis, a UK-based wholesale entertainment product distribution
business which serves both domestic and overseas wholesale, retail and
entertainment markets with CD, DVD and book products.
Chairman's Review
Overall, the results are ahead of the Board's expectations for the first half of
the year. This follows better-than-expected trading across all areas of the
business, illustrated by the growing NPS and the steady performance of Lasgo
Chrysalis.
Operational review
Consolidated NPS was up by 13.8% to GBP7.4m (six months ended 31 March 2009:
GBP6.5m). On a constant currency basis, Consolidated NPS was up by 15.4% to
GBP7.5m (six months ended 31 March 2009: GBP6.5m).
The Group's normalised operating profit has increased by GBP1.2m to GBP2.6m (six
months ended 31 March 2009: GBP1.4m), mainly due to the increased NPS of GBP0.8m
from the success of the re-mastered Beatles album.
Publishing
Publishing NPS was up by 1.6% to GBP6.2m (six months ended 31 March 2009:
GBP6.1m) and up 3.3% on a constant currency basis. Normalised operating profit
increased by GBP0.3m to GBP1.1m (six months ended 31 March 2009: GBP0.8m),
reflecting the increase in NPS and lower artists and repertoire ("A&R")
write-offs.
The share of NPS derived from Mechanical (the sale of physical product) remained
consistent as digital NPS offset the decline in physical sales. The share of
NPS from Performance (public broadcast, live performance) and Synchronisation
(the use of music in TV/film or advertising) is also consistent with the prior
year.
Non-Publishing
Chrysalis Copyrights delivered an excellent result, with normalised operating
profit increasing by GBP0.7m, driven by sales of the re-mastered Beatles album,
resulting in incremental NPS of GBP0.8m. The Echo Label and Flatiron Management
made a normalised operating profit of GBP0.4m, flat on the prior period.
Lasgo Chrysalis
Lasgo Chrysalis has performed ahead of the Board's expectations in the first six
months of the year, with revenues and normalised operating profit remaining
consistent with the strong results achieved in the prior period.
Group Financial Review
Operating results
Revenue for the period totalled GBP32.7m (six months ended 31 March 2009:
GBP31.2m). Chrysalis Music's revenue was GBP19.8m (six months ended 31 March
2009: GBP18.2m), a GBP1.6m increase. On a constant currency basis, revenue
increased by GBP1.7m. Of total revenue, Music Publishing accounted for GBP18.1m
(six months ended 31 March 2009: GBP17.6m) and Non-Publishing accounted for
GBP1.7m (six months ended 31 March 2009: GBP0.6m). Lasgo Chrysalis's revenue
was consistent with the prior period at GBP12.9m.
The Group operating profit of GBP2.3m (six months ended 31 March 2009: GBP2.0m)
includes a net charge reflecting the profit on the sale of Bramley Road
(GBP0.1m), the profit on the surrender of surplus property leases (GBP0.1m),
costs relating to terminated transactions (GBP0.2m) and amortisation of
intangible assets (GBP0.3m). The prior period included the receipt of a lease
surrender premium (GBP0.7m credit) and amortisation of intangible assets
(GBP0.1m).
Music Publishing operating profit increased by GBP0.1m to GBP0.8m (six months
ended 31 March 2009: GBP0.7m). Non-Publishing operating profit increased by
GBP0.7m to GBP1.0m following the success of the re-mastered Beatles album (six
months ended 31 March 2009: GBP0.3m). Lasgo Chrysalis operating profit was
consistent with the prior period at GBP1.3m.
Normalised corporate costs decreased by GBP0.3m to GBP0.8m (six months ended 31
March 2009: GBP1.1m), reflecting our continued focus on reducing corporate
overheads. This excludes the separately disclosed items noted above.
The loss after tax decreased by GBP1.7m to GBP0.5m (six months ended 31 March
2009: GBP2.2m).
Interest and financing
The Group net finance cost was GBP2.8m (six months ended 31 March 2009:
GBP4.6m). The net financing cost is stated after including a loss of GBP0.2m on
our interest rate hedges (six months ended 31 March 2009: GBP3.6m). The
reduction is due to smaller fair value movements in respect of our interest rate
hedges which were offset by additional costs incurred due to the impact of the
rapid decline in interest rates on the settlements under these hedges. In March
2010, we restructured our hedging arrangements, including the unwinding of the
interest rate cap/collar which was replaced by a new interest rate swap. This
will result in a cash interest saving and reduces the potential volatility in
the income statements due to the fair value movements of these instruments.
The Group's net debt at 31 March 2010 was GBP15.8m (31 March 2009: GBP10.0m)
reflecting principally the additional draw-down on our securitisation facility
to finance the acquisition of the Richard Marx catalogue in June 2009.
Following the acquisition of First State Media Group on 1 April 2010, the Group
has an unused facility of GBP22.4m available for further selective catalogue
acquisitions and we continue to review potential acquisitions. We have agreed
in principle to an extension of the revolving period on our securitisation
facility to September 2011.
Acquisitions
On 1 April 2010, we acquired the First State Media Group for a cash
consideration of GBP11.0m, funded from our existing facility. This business has
a similar geographical footprint to Chrysalis and the integration of operations
in each territory is progressing well, including a re-branding of the acquired
companies as Chrysalis One.
This acquisition has secured a level of guaranteed NPS and the opportunity to
partner with international institutional investors in executing our strategy.
Cashflows
The Group's net increase in cash of GBP10.1m principally reflects the additional
drawn down on our securitisation facility of GBP10.0m, the proceeds from the
sale of Bramley Road of GBP6.8m less the cost of unwinding certain derivative
financial instruments. The full purchase price of the Chrysalis One group was
paid on 1 April 2010.
Tax
The Group's tax charge for the period is GBP0.1m (six months ended 31 March
2009: GBP0.3m credit). The difference between this and the standard rate of
corporation tax of 28% is mainly due to irrecoverable withholding tax suffered
in foreign jurisdictions, the non-recognition of deferred tax assets in respect
of unutilised tax losses and depreciation in excess of capital allowances.
Earnings per share and dividends
Normalised loss per share was 0.12p (six months ended 31 March 2009: earnings of
GBP1.03p). It is not proposed to pay a dividend in respect of the six months
ended 31 March 2010. Future dividend policy will be determined by the Board,
with regard to the Group's ongoing earnings.
Full year outlook
Publishing
The Board is confident of achieving continued NPS growth in 2010 following a
good first-half performance. The full year will include the benefit of the
strong release schedule, which continues into the second half, and the results
of Chrysalis One, the recent addition to the Group.
Non-Publishing
The significant success of the Beatles re-mastering has been recognised in the
first half, and the Board remains confident that Chrysalis Copyrights and the
other Non-Publishing businesses will perform in line with expectations for the
full year.
Lasgo Chrysalis
Lasgo Chrysalis's performance in the first six months exceeded the Board's
expectations for the period. Whilst this trend has continued in recent trading,
the Board is mindful that Lasgo trades in the volatile entertainment product
retail market.
Chrysalis continues to benefit from the quality of its publishing assets, the
strength of its A&R decisions, its successful rights management activities and
the hard work of its staff. The Board remains focused on ensuring that the
day-to-day performance of both Chrysalis Music and Lasgo Chrysalis are optimal
in enhancing the value of its core assets for the benefit of all shareholders.
Chris Wright
Chairman
25 May 2010
Risks and uncertainties
The key risks and uncertainties that affect the Group are described in detail on
pages 22 to 23 of the 2009 Annual Report available at www.chrysalis.com. In
summary, they include:
General risks relating to the business of the Group
· Significant further downturn in the economy
· Failure to successfully integrate acquisitions
· Exchange rate risk
Music Publishing
· The ongoing downward movement in mechanical revenue
· Failure of the publishing industry to fully exploit and monetise the use
of music in fast growing areas of music consumption such as social networking
sites
Lasgo Chrysalis
· Stock risk
· A decline in book margins
· Further global downturn in music retail sales & weakness of releases in
the audio and non-audio markets
· Loss of key individuals
· Withdrawal of credit insurance
· Adverse exchange rates impacting its import and export business
· Lack of suppliers of deal product for DVD
These are still considered to be the most relevant risks and uncertainties at
this time. A number of these risks and uncertainties could have an impact on
the Group's performance over the remaining six months of the period and could
cause actual results to differ from expected and historical results. Where a
risk that was disclosed in the Annual Report is unchanged, further disclosure in
this report is considered unnecessary.
In addition to the above, the Group's borrowings are subject to floating
interest rates and it is therefore exposed to movements in interest rates. The
Group has entered into interest rate swaps to achieve a suitable mix of fixed
and floating interest exposure.
Responsibility statement of the directors in respect of the interim financial
report
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU.
· The interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
period and their impact on the condensed interim financial statements; and a
description of the principal risks and uncertainties for the remaining six
months of the financial period; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial period and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
By order of the Board
Jeremy Lascelles (Group Chief Executive)
Andy Mollett (Group Finance Director)
25 May 2010
On behalf of the Board
Chris Wright(Chairman)
Jeremy Lascelles (Group Chief Executive)
Andy Mollett (Group Finance Director)
Peter Lassman
David Murrell
Adam Driscoll
Jorgen Larsen
Chrysalis PLC
Condensed consolidated income statement (unaudited)
For the six months ended 31 March 2010
+--------------------------------+------+-----------+-----------+-----------+
| | | 6 months | 6 months | Year |
| | | ended | ended | ended |
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
+--------------------------------+------+-----------+-----------+-----------+
| |Note | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+------+-----------+-----------+-----------+
| | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Revenue | 2 | 32,730 | 31,242 | 62,876 |
+--------------------------------+------+-----------+-----------+-----------+
| Operating expenses | | (30,405) | (29,230) | (60,655) |
+--------------------------------+------+-----------+-----------+-----------+
| Operating profit | 2 | 2,325 | 2,012 | 2,221 |
+--------------------------------+------+-----------+-----------+-----------+
| Analysed as: | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Operating profit/(loss) before | 2,612 | (1,385) | 3,344 |
| separately disclosed items | | | |
+---------------------------------------+-----------+-----------+-----------+
| Separately disclosed items | 3 | (287) | 627 | (1,123) |
+--------------------------------+------+-----------+-----------+-----------+
| Finance income | | 80 | 302 | 374 |
+--------------------------------+------+-----------+-----------+-----------+
| Finance costs | | (2,859) | (4,864) | (6,465) |
+--------------------------------+------+-----------+-----------+-----------+
| Net financing cost | 3,4 | (2,779) | (4,562) | (6,091) |
+--------------------------------+------+-----------+-----------+-----------+
| | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Share of (losses)/profits of equity | (30) | - | 28 |
| accounted investments | | | |
+---------------------------------------+-----------+-----------+-----------+
| Loss before tax | | (484) | (2,550) | (3,842) |
+--------------------------------+------+-----------+-----------+-----------+
| Tax (charge)/credit | 5 | (54) | 305 | 116 |
+--------------------------------+------+-----------+-----------+-----------+
| Loss for the period | (538) | (2,245) | (3,726) |
+---------------------------------------+-----------+-----------+-----------+
| | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Attributable to: | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Equity holders of parent | | (532) | (2,319) | (3,856) |
+--------------------------------+------+-----------+-----------+-----------+
| Minority interests (equity | | (6) | 74 | 130 |
| interests) | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Loss for the period | | (538) | (2,245) | (3,726) |
+--------------------------------+------+-----------+-----------+-----------+
| | | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Loss per share | 6 | | | |
+--------------------------------+------+-----------+-----------+-----------+
| Basic and diluted | | (0.79)p | (3.45)p | (5.74)p |
| loss/earnings per share | | | | |
+--------------------------------+------+-----------+-----------+-----------+
Condensed consolidated statement of comprehensive income (unaudited)
For the six months ended 31 March 2010
+------------------------------------+----------+----------+------------+
| | 6 months | 6 months | Year ended |
| | ended | ended | 30 |
| | 31 March | 31 March | September |
| | 2010 | 2009 | 2009 |
+------------------------------------+----------+----------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+----------+----------+------------+
| | | | |
+------------------------------------+----------+----------+------------+
| Loss for the period | (538) | (2,245) | (3,726) |
+------------------------------------+----------+----------+------------+
| | | | |
+------------------------------------+----------+----------+------------+
| Other comprehensive income | | | |
+------------------------------------+----------+----------+------------+
| Exchange differences on | 636 | (255) | (313) |
| translation of foreign operations | | | |
+------------------------------------+----------+----------+------------+
| Movement in fair value of cash | (654) | (3,658) | (2,328) |
| flow hedges | | | |
+------------------------------------+----------+----------+------------+
| Amount recycled in respect of cash | 316 | 55 | 141 |
| flow hedges | | | |
+------------------------------------+----------+----------+------------+
| Total other comprehensive income | 298 | (3,858) | (2,500) |
+------------------------------------+----------+----------+------------+
| | | | |
+------------------------------------+----------+----------+------------+
| Total comprehensive income for the | 240 | (6,103) | (6,226) |
| period | | | |
+------------------------------------+----------+----------+------------+
| | | | |
+------------------------------------+----------+----------+------------+
| Attributable to: | | | |
+------------------------------------+----------+----------+------------+
| Equity holders of parent | 251 | (6,269) | (6,435) |
+------------------------------------+----------+----------+------------+
| Minority interests (equity | (11) | 166 | 209 |
| interests) | | | |
+------------------------------------+----------+----------+------------+
| Total comprehensive income for the | 240 | (6,103) | (6,226) |
| period | | | |
+------------------------------------+----------+----------+------------+
Condensed consolidated balance sheet (unaudited)
As at 31 March 2010
+--------------------------------+------+------------+----------+-----------+
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
| | | | | |
+--------------------------------+------+------------+----------+-----------+
| |Note | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+------+------------+----------+-----------+
| Assets | | | | |
+--------------------------------+------+------------+----------+-----------+
| Goodwill | | 1,061 | 1,061 | 1,061 |
+--------------------------------+------+------------+----------+-----------+
| Other intangible assets | | 9,420 | 4,315 | 9,174 |
+--------------------------------+------+------------+----------+-----------+
| Property, plant and equipment | | 577 | 1,054 | 848 |
+--------------------------------+------+------------+----------+-----------+
| Total non-current assets | | 11,058 | 6,430 | 11,083 |
+--------------------------------+------+------------+----------+-----------+
| | | | | |
+--------------------------------+------+------------+----------+-----------+
| Inventories | | 1,646 | 2,330 | 1,742 |
+--------------------------------+------+------------+----------+-----------+
| Trade and other receivables | | 29,517 | 25,474 | 26,607 |
+--------------------------------+------+------------+----------+-----------+
| Assets held for sale | | - | 8,000 | 6,500 |
+--------------------------------+------+------------+----------+-----------+
| Cash and cash equivalents | 7 | 31,375 | 28,749 | 22,947 |
+--------------------------------+------+------------+----------+-----------+
| Total currents assets | | 62,538 | 64,553 | 57,796 |
+--------------------------------+------+------------+----------+-----------+
| Total assets | | 73,596 | 70,983 | 68,879 |
+--------------------------------+------+------------+----------+-----------+
| | | | | |
+--------------------------------+------+------------+----------+-----------+
| Liabilities | | | | |
+--------------------------------+------+------------+----------+-----------+
| Interest-bearing loans and | | (41,947) | (29,830) | (33,876) |
| borrowings | | | | |
+--------------------------------+------+------------+----------+-----------+
| Provisions | | - | (1,010) | (898) |
+--------------------------------+------+------------+----------+-----------+
| Deferred consideration | | (330) | - | (313) |
+--------------------------------+------+------------+----------+-----------+
| Total non-current liabilities | | (42,277) | (30,840) | (35,087) |
+--------------------------------+------+------------+----------+-----------+
| | | | | |
+--------------------------------+------+------------+----------+-----------+
| Interest-bearing loans and | | (5,219) | (8,928) | (4,826) |
| borrowings | | | | |
+--------------------------------+------+------------+----------+-----------+
| Trade and other payables | | (27,670) | (27,727) | (27,839) |
+--------------------------------+------+------------+----------+-----------+
| Derivative financial | | (3,304) | (7,580) | (5,761) |
| instruments | | | | |
+--------------------------------+------+------------+----------+-----------+
| Total current liabilities | | (36,193) | (44,235) | (38,426) |
+--------------------------------+------+------------+----------+-----------+
| Total liabilities | | (78,470) | (75,075) | (73,513) |
+--------------------------------+------+------------+----------+-----------+
| Net current assets | | 26,345 | 20,318 | 19,370 |
+--------------------------------+------+------------+----------+-----------+
| Net liabilities | | (4,874) | (4,092) | (4,634) |
+--------------------------------+------+------------+----------+-----------+
| | | | | |
+--------------------------------+------+------------+----------+-----------+
| Equity attributable to equity | | | |
| holders of parent | | | |
+---------------------------------------+------------+----------+-----------+
| Issued capital | | 1,343 | 1,343 | 1,343 |
+--------------------------------+------+------------+----------+-----------+
| Share premium | | 4 | 4 | 4 |
+--------------------------------+------+------------+----------+-----------+
| Merger reserve | | 1,343 | 1,343 | 1,343 |
+--------------------------------+------+------------+----------+-----------+
| Foreign exchange reserve | | (280) | (876) | (921) |
+--------------------------------+------+------------+----------+-----------+
| Hedging reserve | | (1,034) | (2,112) | (696) |
+--------------------------------+------+------------+----------+-----------+
| Other reserve | | 741 | 741 | 741 |
+--------------------------------+------+------------+----------+-----------+
| Retained loss | | (7,166) | (5,097) | (6,634) |
+--------------------------------+------+------------+----------+-----------+
| | | (5,049) | (4,654) | (4,820) |
+--------------------------------+------+------------+----------+-----------+
| Minority interests (equity | | 175 | 562 | 186 |
| interests) | | | | |
+--------------------------------+------+------------+----------+-----------+
| Total equity | | (4,874) | (4,092) | (4,634) |
+--------------------------------+------+------------+----------+-----------+
Condensed consolidated statement of changes in equity (unaudited)
For the six months ended 31 March 2010
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| | Share | Share | Merger | Foreign | Hedging | Other | Retained | | Minority | Total |
| | capital | premium | reserve | exchange | reserve | reserve | earnings | Total | interest | equity |
| | | | | reserve | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| 1 October | | 4 | 1,343 | (529) | 1,491 | 741 | (2,778) | 1,615 | 396 | 2,011 |
| 2008 | 1,343 | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Loss for the | - | - | - | - | - | - | (2,319) | (2,319) | 74 | (2,245) |
| period | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Other | - | - | - | (347) | (3,603) | - | - | (3,950) | 92 | (3,858) |
| comprehensive | | | | | | | | | | |
| income | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| 31 March 2009 | 1,343 | 4 | 1,343 | (876) | (2,112) | 741 | (5,097) | (4,654) | 562 | (4,092) |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Loss for the | - | - | - | | - | - | (1,537) | (1,537) | 56 | (1,481) |
| period | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Other | - | - | - | (45) | 1,416 | - | - | 1,371 | (13) | 1,358 |
| comprehensive | | | | | | | | | | |
| income | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Deemed | - | - | - | - | - | - | - | - | (419) | (419) |
| dividend | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| 30 September | 1,343 | 4 | 1,343 | (921) | (696) | 741 | (6,634) | (4,820) | 186 | (4,634) |
| 2009 | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Loss for the | - | - | - | - | - | - | (532) | (532) | (6) | (538) |
| period | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| Other | - | - | - | 641 | (338) | - | - | 303 | (5) | 298 |
| comprehensive | | | | | | | | | | |
| Income | | | | | | | | | | |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
| 31 March 2010 | 1,343 | 4 | 1,343 | (280) | (1,034) | 741 | (7,166) | (5,049) | 175 | (4,874) |
+---------------+---------+---------+---------+----------+---------+---------+----------+---------+----------+---------+
Condensed consolidated statement of cash flows (unaudited)
For the six months ended 31 March 2010
+-------------------------------------+----------+-----------+-----------+
| | 6 months | 6 months | Year |
| | ended | ended | ended |
| | 31 March | 31 March | 30 |
| | 2010 | 2009 | September |
| | | | 2009 |
+-------------------------------------+----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+----------+-----------+-----------+
| Cash flows from operating | | | |
| activities | | | |
+-------------------------------------+----------+-----------+-----------+
| Loss for the period | (538) | (2,245) | (3,726) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Adjustments for: | | | |
+-------------------------------------+----------+-----------+-----------+
| Depreciation | 175 | 243 | 475 |
+-------------------------------------+----------+-----------+-----------+
| Finance income | (80) | (302) | (374) |
+-------------------------------------+----------+-----------+-----------+
| Finance costs | 2,859 | 4,864 | 3,233 |
+-------------------------------------+----------+-----------+-----------+
| Share of (profits)/losses of equity | 30 | - | (28) |
| accounted investments | | | |
+-------------------------------------+----------+-----------+-----------+
| Separately disclosed items | 97 | 113 | 5,006 |
+-------------------------------------+----------+-----------+-----------+
| Income tax charge/(credit) | 54 | (305) | (528) |
+-------------------------------------+----------+-----------+-----------+
| Non cash items | (29) | 16 | (195) |
+-------------------------------------+----------+-----------+-----------+
| | 2,568 | 2,384 | 3,863 |
+-------------------------------------+----------+-----------+-----------+
| (Increase)/decrease in trade and | (2,816) | (261) | (3,257) |
| other receivables | | | |
+-------------------------------------+----------+-----------+-----------+
| Increase/(decrease) in inventories | 96 | (103) | 485 |
+-------------------------------------+----------+-----------+-----------+
| Decrease in trade and other | (589) | (996) | 672 |
| payables | | | |
+-------------------------------------+----------+-----------+-----------+
| Decrease in provisions and employee | (203) | (181) | (313) |
| benefits | | | |
+-------------------------------------+----------+-----------+-----------+
| | (944) | 843 | 1,450 |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Interest received | 80 | 302 | 374 |
+-------------------------------------+----------+-----------+-----------+
| Interest paid | (2,440) | (1,167) | (2,718) |
+-------------------------------------+----------+-----------+-----------+
| Income tax (paid)/received | (33) | (91) | 59 |
+-------------------------------------+----------+-----------+-----------+
| | (2,393) | (956) | (2,285) |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Net cash used in operating | (3,337) | (113) | (835) |
| activities | | | |
+-------------------------------------+----------+-----------+-----------+
| Cash flows from investing | | | |
| activities | | | |
+-------------------------------------+----------+-----------+-----------+
| Acquisition of intangible assets | (223) | - | (4,904) |
+-------------------------------------+----------+-----------+-----------+
| Acquisition of property, plant and | (151) | (253) | (295) |
| equipment | | | |
+-------------------------------------+----------+-----------+-----------+
| Receipt/(payment) in respect of | - | 1,495 | 1,495 |
| pension scheme buyout | | | |
+-------------------------------------+----------+-----------+-----------+
| Proceeds from sales of property, | 6,800 | - | - |
| plant, equipment and intangible | | | |
| fixed assets | | | |
+-------------------------------------+----------+-----------+-----------+
| Loans (advanced to)/repaid by | (39) | (4) | 48 |
| equity accounted investments | | | |
+-------------------------------------+----------+-----------+-----------+
| Net cash from/(used in) investing | 6,387 | 1,238 | (3,656) |
| activities | | | |
+-------------------------------------+----------+-----------+-----------+
| Cash flows from financing | | | |
| activities | | | |
+-------------------------------------+----------+-----------+-----------+
| Repayment of borrowings | - | (5,500) | (12,700) |
+-------------------------------------+----------+-----------+-----------+
| Payment to restructure hedge | (3,000) | - | - |
| arrangements | | | |
+-------------------------------------+----------+-----------+-----------+
| Increase in borrowings | 10,000 | 10,500 | 15,500 |
+-------------------------------------+----------+-----------+-----------+
| Net decrease in cash from financing | 7,000 | 5,000 | 2,800 |
| activities | | | |
+-------------------------------------+----------+-----------+-----------+
| | | | |
+-------------------------------------+----------+-----------+-----------+
| Net increase/(decrease) in cash and | 10,050 | 6,125 | (1,691) |
| cash equivalents | | | |
+-------------------------------------+----------+-----------+-----------+
| Cash and cash equivalents at 1 | 19,188 | 20,406 | 20,406 |
| September | | | |
+-------------------------------------+----------+-----------+-----------+
| Effects of exchange rate changes on | 23 | 489 | 473 |
| cash and cash equivalents | | | |
+-------------------------------------+----------+-----------+-----------+
| Cash and cash equivalents at end of | 29,261 | 27,020 | 19,188 |
| period | | | |
+-------------------------------------+----------+-----------+-----------+
Notes to the financial statements
For the six months ended 31 March 2010
1. Accounting policies
Basis of preparation
These condensed unaudited consolidated interim financial statements for the six
month period ended 31 March 2010 have been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Services Authority and IAS 34
Interim Financial Reporting as adopted by the EU. They do not include all the
information required for full annual financial statements and should be read in
conjunction with the consolidated financial statements for the year ended 30
September 2010. The Group will publish its full annual consolidated financial
statements for the year ending 30 September 2010 in December 2010. These
condensed consolidated interim financial statements were approved by the Board
of Directors on 25 May 2010.
The comparative figures for the year ended 30 September 2009 are not the
company's statutory accounts for that financial period. Those accounts have
been reported on by the company's auditors and delivered to the registrar of
companies. The report of the auditors was (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a statement
under section 498(2) or 498(3) of the Companies Act 2006.
Accounting policies
The accounting policies applied by the Group in these condensed interim
financial statements are in accordance with International Financial Reporting
Standard as adopted by the European Union ('Adopted IFRS') and are the same as
those accounting policies which were applied by Chrysalis PLC in its
consolidated financial statements for the year ended 30 September 2009. Except
as noted below, the same accounting policies are anticipated to be applied for
the year ending 30 September 2010.
The following new and revised standards were adopted by the Group on 1 October
2009.
Standards affecting presentation and disclosure
· IAS 1 (revised 2007) Presentation of Financial Statementsrequires the
presentation of a statement of changes in equity as a primary statement,
separate from the income statement and statement of comprehensive income. A
consolidated statement of changes in equity has been included in the primary
statements, showing changes in each component of equity for each period
presented.
· IFRS 8 Operating segments requires operating segments to be identified on
the basis of internal reports about components of the Group that are regularly
reviewed by the Group's chief operating decision-maker, which in the case of
Chrysalis PLC is its senior executive team, to allocate resources to the
segments and to assess their performance. Internal reports include GAAP and
non-GAAP measures, including revenue, operating profit and NPS. As NPS is
considered to be a key measure of the performance of the Group and industry,
this is now included in our segment information in Note 2. This standard has
not resulted in any change to the Group's reportable segments.
These standards only affect the presentation and disclosures required in
financial statements and accordingly have no impact on the results of the Group.
Comparative amounts have been represented in conformity with the transitional
requirements of these standards.
Standards affecting the reported results and financial position
IFRS 3 (revised 2008) Business Combinations and IAS 27 (revised 2008) applies to
all acquisitions by the Group completed after 1 October 2009. For any such
business combinations:
- All acquisition-related costs must be expensed as they are incurred.
- Contingent consideration must be measured at fair value at the
acquisition date and form part of the total consideration. Subsequent changes
in fair value must be recognised in profit or loss as they arise.
- Where step acquisitions occur, the equity holding at the date on which
control is achieved must be re-measured to its fair value at that date, with the
difference between carrying value and fair value recognised in profit or loss.
- Transactions between equity holders, including increases or decreases in
ownership that do not result in a change of control, are reported within equity
with no impact on profit or loss.
This standard applies prospectively and therefore has no impact on acquisitions
completed by the Group prior to 1 October 2009. It will be applied to the
Group's acquisition of First State Media Group (Ireland) Limited in the
financial statements for the year ended 30 September 2010, however as set out in
note 8, the impact cannot be estimated at this time.
Notes to the financial statements
For the six months ended 31 March 2010
1. Accounting policies (continued)
Going concern
The Directors have considered the funding and liquidity position of the Group.
The Board remains satisfied with the Group's funding and liquidity position.
The Group has net liabilities of GBP4.9m and net current assets of GBP26.3m at
31 March 2010. The net liability position includes the liabilities of GBP3.3m
which reflects the fair value of derivative financial instruments. In addition,
we have undrawn credit facilities of GBP22.4m and cash of GBP29.3m. The main
source of debt funding is a bank loan of GBP46.6m which is repayable in
bi-annual instalments from 10 September 2010 to 2021.
The Directors consider that, on the basis of current financial projections and
available facilities, the Group has adequate working capital and other resources
to enable the Group to continue trading for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the
Group financial statements.
Estimates
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and reported accounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit/ (loss), the following
measures:
· normalised operating profit;
· normalised profit before interest, tax and amortisation;
· normalised profit before tax; and
· net publishers' share
provide additional guidance to the statutory measures of the performance of the
business during the financial period.
Normalised measures are stated before separately disclosed items. These items
comprise individually significant items, by size or nature, which the Group
believes should be separately disclosed to assist in the understanding of the
business.
Net publisher's share ("NPS") is the revenue received by a music publisher, less
any royalties that have to be paid to writers, performers and others receiving a
share of royalties.
Further details are included in Note 3.
None of the these non-GAAP profit and loss measures set out above are Adopted
IFRS and therefore may not be directly comparable with other companies adjusted
profit measures. They are not intended to be a substitute for or superior to
Adopted IFRS measurements of profit.
Notes to the financial statements
For the six months ended 31 March 2010
2. Segmental information
+------------------------------+---------+-------------+---------+-----------+
| | 6 | | 6 | Year |
| | months | | months | ended |
| | ended | | ended | 30 |
| | 31 | | 31 | September |
| | March | | March | 2009 |
| | 2010 | | 2009 | |
+------------------------------+---------+-------------+---------+-----------+
| Revenue | GBP'000 | | GBP'000 | GBP'000 |
+------------------------------+---------+-------------+---------+-----------+
| | | | | |
+------------------------------+---------+-------------+---------+-----------+
| Publishing | 18,094 | | 17,606 | 35,931 |
+------------------------------+---------+-------------+---------+-----------+
| Non-publishing | 1,701 | | 642 | 3,233 |
+------------------------------+---------+-------------+---------+-----------+
| Lasgo Chrysalis | 12,935 | | 12,994 | 23,712 |
+------------------------------+---------+-------------+---------+-----------+
| | 32,730 | | 31,242 | 62,876 |
+------------------------------+---------+-------------+---------+-----------+
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| | | | 6 | | | 6 | 13 |
| | | | months | | | months | months |
| | | | ended | | | ended | ended |
| | | | 31 | | | 31 | 30 |
| | | | March | | | March | September |
| | | | 2010 | | | 2009 | 2009 |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| | Normalised | Separately | Total | Normalised | Separately | Total | Total |
| | | disclosed | | | disclosed | | |
| | | items | | | items | | |
| | | (Note 5) | | | (Note 5) | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Segment | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| result | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Publishing | 1,091 | (262) | 829 | 828 | (113) | 715 | 1,929 |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Non-publishing | 1,018 | - | 1,018 | 307 | - | 307 | 756 |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Lasgo | 1,302 | - | 1,302 | 1,329 | - | 1,329 | 2,036 |
| Chrysalis | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Corporate | (799) | (25) | (824) | (1,079) | 740 | (339) | (2,500) |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Operating | 2,612 | (287) | 2,325 | 1,385 | 627 | 2,012 | 2,221 |
| profit/(loss) | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Net finance | (2,612) | (167) | (2,779) | (927) | (3,635) | (4,562) | (6,091) |
| (costs)/income | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Share of | (30) | - | (30) | - | - | - | 28 |
| profits/(loss) | | | | | | | |
| of equity | | | | | | | |
| accounted | | | | | | | |
| investments | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Profit/(loss) | (30) | (454) | (484) | 458 | (3,008) | (2,550) | (3,842) |
| before tax | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Tax | (54) | - | (54) | 305 | - | 305 | 116 |
| (charge)/credit | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
| Profit/(loss) | (84) | (454) | (538) | 763 | (3,008) | (2,245) | (3,726) |
| for the | | | | | | | |
| period | | | | | | | |
+-----------------+------------+------------+---------+------------+------------+---------+-----------+
In certain segments, NPS is a key performance measure and is therefore disclosed
for those segments.
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| | | | 6 | | | 6 | Year |
| | | | months | | | months | ended |
| | | | ended | | | ended | 30 |
| | | | 31 | | | 31 | September |
| | | | March | | | March | 2009 |
| | | | 2010 | | | 2009 | |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| | Net | Other | Normalised | Net | Other | Normalised | Net |
| | publisher's | operating | operating | publisher's | operating | operating | publisher's |
| | share | expenses | profit | share | expenses | profit | share |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| | | | | | | | |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| Publishing | 6,204 | (5,113) | 1,091 | 6,084 | (5,256) | 828 | 12,271 |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| Non-publishing | 1,213 | (195) | 1,018 | 377 | (70) | 307 | 1,087 |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
| Consolidated | 7,417 | (5,308) | 2,109 | 6,461 | (5,326) | 1,135 | 13,358 |
| net | | | | | | | |
| publisher's | | | | | | | |
| share | | | | | | | |
+----------------+-------------+-----------+------------+-------------+-----------+------------+-------------+
Other operating expenses include A&R write-offs and operating overheads, but
exclude any separately disclosed items.
Notes to the financial statements
For the six months ended 31 March 2010
3. Separately disclosed items
Separately disclosed items impact operating profit/ (loss), net finance
(cost)/income and as follows:
+---------------------------------+-----+-----------+-----------+-----------+
| | | 6 months | 6 months | Year |
| | | ended | ended | ended |
| | | 31 March | 31 March | 30 |
| | | 2010 | 2009 | September |
| | | | | 2009 |
+---------------------------------+-----+-----------+-----------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------+-----+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Amortisation of intangible | | (262) | (113) | (274) |
| assets | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Profit on disposal of freehold | (a) | 91 | - | - |
| land and buildings | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Profit on surrender of vacant | (b) | 75 | - | - |
| properties | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Costs relating to a potential | (c) | (191) | - | - |
| transaction | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Lease surrender premium | (d) | - | 740 | 740 |
+---------------------------------+-----+-----------+-----------+-----------+
| Redundancy costs | (e) | - | - | (89) |
+---------------------------------+-----+-----------+-----------+-----------+
| Impairment of land and | (f) | - | - | (1,500) |
| buildings | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Operating profit/(loss) | | (287) | 627 | (1,123) |
+---------------------------------+-----+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Net finance (cost)/income | (g) | (167) | (3,635) | (3,232) |
+---------------------------------+-----+-----------+-----------+-----------+
| | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
| Total separately disclosed | | (454) | (3,008) | (4,355) |
| items | | | | |
+---------------------------------+-----+-----------+-----------+-----------+
31 March 2010
a) This relates to the net profit on the disposal of the Group's freehold
property at Bramley Road. The Group entered into a fixed term operating lease
over certain floors and its UK operations continue to be based there.
b) This relates to the net proceeds on the surrender of the operating lease
over vacant office space, resulting from the disposal of Chrysalis Radio in
2007, including the release of the balance of the vacant property provision.
c) This relates to the legal and other professional fees incurred in
anticipation of a potential transaction, which was ultimately terminated.
g) This relates to the fair value movement in derivative financial
instruments.
31 March 2009 and 30 September 2009
d) This related to a lease surrender premium received from Global Radio
following its early termination of operating leases over office space.
e) This comprised the redundancy and associated costs of reorganising the
Corporate function.
f) This related to the impairment loss recognised against land and buildings
held for sale, to reflect the then current fair value.
Notes to the financial statements
For the six months ended 31 March 2010
4. Net financing (costs)/income
+--------------------------------------+-----------+-----------+-----------+
| | 6 months | 6 months | Year |
| | ended | ended | ended |
| | 31 March | 31 March | 30 |
| | 2010 | 2009 | September |
| | | | 2009 |
+--------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+-----------+-----------+-----------+
| | | | |
+--------------------------------------+-----------+-----------+-----------+
| Finance income | | | |
+--------------------------------------+-----------+-----------+-----------+
| Bank interest receivable | 80 | 302 | 374 |
+--------------------------------------+-----------+-----------+-----------+
| | | | |
+--------------------------------------+-----------+-----------+-----------+
| Financing costs | | | |
+--------------------------------------+-----------+-----------+-----------+
| Bank loans and overdrafts | 2,232 | 902 | 2,694 |
+--------------------------------------+-----------+-----------+-----------+
| Amortisation of issuance costs on | 114 | 128 | 227 |
| securitisation loan | | | |
+--------------------------------------+-----------+-----------+-----------+
| Fair value movements on derivative | 167 | 3,635 | 3,232 |
| financial instruments | | | |
+--------------------------------------+-----------+-----------+-----------+
| Loss on settlement of derivative | 316 | 55 | |
| financial instruments | | | |
+--------------------------------------+-----------+-----------+-----------+
| Unwinding of discount on provisions | 30 | 19 | 39 |
+--------------------------------------+-----------+-----------+-----------+
| Other | - | 125 | 273 |
+--------------------------------------+-----------+-----------+-----------+
| | 2,859 | 4,864 | 6,465 |
+--------------------------------------+-----------+-----------+-----------+
| | | | |
+--------------------------------------+-----------+-----------+-----------+
| Net financing (costs)/income | (2,779) | (4,562) | (6,091) |
+--------------------------------------+-----------+-----------+-----------+
5. Taxation
The group's tax charge for the period is GBP0.1 million. The difference between
this and the standard rate of corporation tax of 28% is mainly due to
irrecoverable withholdings tax suffered in foreign jurisdictions, the
non-recognition of deferred tax assets in respect of unutilised tax losses and
depreciation in excess of capital allowances.
Notes to the financial statements
For the six months ended 31 March 2010
6. (Loss)/earnings per share
+----------------------------------------+-----------+-----------+-----------+
| | 6 months | 6 months | Year |
| | ended | ended | ended |
| | 31 March | 31 March | 30 |
| | 2009 | 2009 | September |
| | | | 2009 |
+----------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------+-----------+-----------+-----------+
| Loss attributable to equity holders of | (532) | (2,319) | (3,856) |
| parent | | | |
+----------------------------------------+-----------+-----------+-----------+
| Separately disclosed items | 454 | 3,008 | 4,355 |
+----------------------------------------+-----------+-----------+-----------+
| Normalised (loss)/profit | (78) | 689 | 499 |
+----------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------+-----------+-----------+-----------+
| Weighted average number of shares in | | | |
| issue ('000) | | | |
+----------------------------------------+-----------+-----------+-----------+
| Basic | 67,143 | 67,143 | 67,143 |
+----------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------+-----------+-----------+-----------+
| Loss per share | | | |
+----------------------------------------+-----------+-----------+-----------+
| Basic and diluted | (0.79)p | (3.45)p | (5.74)p |
+----------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------+-----------+-----------+-----------+
| Normalised (loss)/earnings per share | | | |
+----------------------------------------+-----------+-----------+-----------+
| Basic and diluted | (0.12)p | 1.03p | 0.74p |
+----------------------------------------+-----------+-----------+-----------+
None of the outstanding options was dilutive in the respective period ends.
7. Cash and cash equivalents
+----------------------------------------+-----------+-----------+-----------+
| | 31 March | 31 March | 30 |
| | 2010 | 2009 | September |
| | | | 2009 |
+----------------------------------------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents per balance | 31,275 | 28,749 | 22,947 |
| sheet | | | |
+----------------------------------------+-----------+-----------+-----------+
| Bank overdrafts | (2,114) | (1,729) | (3,759) |
+----------------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents in the cash | 29,261 | 27,020 | 19,188 |
| flow statement | | | |
+----------------------------------------+-----------+-----------+-----------+
At 31 March 2009, cash and cash equivalents included GBP7.2 million held in an
escrow account in respect of the repayment of the loan notes.
8. Post balance sheet events
On 1 April 2010, the Group acquired 100% of the share capital of First State
Media Group (Ireland) Limited, an international music publishing business, for
GBP11.0m (US$16.5m) from First State Media Holdings Limited, a subsidiary of
Commonwealth Bank of Australia Limited, and Dream Theatre (Music and Arts)
Ireland Limited and Dream Theatre Ireland No.2 Limited, two entities associated
with the management of FSMG. The purchase consideration was fully funded from
the Group's existing facilities and was settled in full on completion.
The transaction entitles Chrysalis to:
· approximately GBP2.7m (US$4.0m) per year of stable NPS over a 6½ year
period, over 65% of which is derived from an administration fee based on
purchase price;
· approximately GBP0.5m (US$0.8m) per year of NPS from FSMG's owned
copyrights and other third party copyrights; and
· the right to advise the Fund in investing the remaining GBP6.7m
(US$10.0m) it has in available funds, for which Chrysalis would earn a fee.
The impact of this acquisition is being determined and will be included in the
financial statements for the year ending
30 September 2010.
INDEPENDENT REVIEW REPORT TO CHRYSALIS PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the interim financial report for the six months ended 31 March
2010 which comprises the condensed income statement, condensed balance sheet,
condensed consolidated statement of changes in equity, condensed consolidated
cash flow statement and the related explanatory notes. We have read the other
information contained in the interim financial report and considered whether it
contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Disclosure
and Transparency Rules ("the DTR") of the UK's Financial Services Authority
("the UK FSA"). Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim financial report is the responsibility of, and has been approved by,
the directors. The directors are responsible for preparing the interim
financial report in accordance with the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the EU. The condensed set of
financial statements included in this interim financial report has been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the interim financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the interim financial report
for the six months ended 31 March 2010 is not prepared, in all material
respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK
FSA.
Steve Masters (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
8 Salisbury Square
London
EC4Y 8BB
25 May 2010
This information is provided by RNS
The company news service from the London Stock Exchange
END
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