RNS Number:1158S
Chrysalis Group PLC
17 November 2003
17 November 2003
CHRYSALIS GROUP PLC
PRELIMINARY RESULTS TO 31st AUGUST 2003
Chrysalis Group today announces its unaudited preliminary results for the 12
months ended 31st August 2003.
Key Highlights
* Group EBITA(1) up 6.0% to #14.2m
* Group EBITA(1), excluding LBC first year losses, up 35.6% to #18.1m
* 53.8% increase in final dividend per share to 1.0p
* Heart 106.2 overtakes Capital 95.8 to become London's most listened to
commercial station
* Chrysalis Music delivers 9.4% growth in music publishing NPS to #9.3m
* Sale of Chrysalis Television for #50.8m, delivering on corporate
strategy
* Strong start to current financial year
Group Financial Highlights
Unaudited Results
* Group Turnover + 4.5% to #246.0m (2002: #235.4m)
* Total Operating Profit #10.4m (2002: #10.5m)
* Operating Profit, excluding LBC first year losses +46.8% to #15.5m (2002: #10.5m)
* Exceptional profit(2) 18.6m (2002: #(0.3)m)
* Pre-tax Profit #23.9m (2002: #5.8m)
* Basic earnings per share 13.59p (2002: 3.41p)
* Special dividend on Television disposal, paid Sep 2003 5p
* Final dividend per share +53.8% to 1.0p (2002: 0.65p)
* Net debt position(3) #28.5m (2002: #42.8m)
Results: prior to goodwill amortisation and exceptional items
* EBITA(1) + 6.0% to #14.2m (2002: #13.4m)
* EBITA(1), excluding LBC first year losses + 35.6% to #18.1m (2002: #13.4m)
* Pre tax profit + 9.8% to #8.4m (2002: #7.6m)
(1)EBITA comprises earnings before interest, tax and amortisation
(2)Exceptional profit on corporate disposals (principally Chrysalis Television
and Galaxy 101)
(3) 2002 net debt excludes #16.8m non interest bearing ringfenced sale and
leaseback deposits relating to Chrysalis TV
Operational Highlights
* Continued industry outperformance from Chrysalis Radio
* Total radio revenue up 14.1%
- Like-for-like radio revenue (ex LBC and Galaxy 101) up 12.4%
* Radio EBITA (ex LBC and Galaxy 101) reaches #13.3m, a 31.1% increase
on 2002
* Acquisition of LBC for #24.5 m in September 2002, stations
successfully re-launched in January 2003
* Music Publishing delivers NPS of #9.3m, a year-on-year increase of
9.4%
* Lasgo Chrysalis increases revenues by 27.7%, driven by great demand
for DVDs
* Disposal of Chrysalis Television for a total consideration of #50.8m
in August 2003
* Restructuring and operational review of Chrysalis Books Group now
complete
Current trading
* Strong start to current financial year
* Chrysalis Radio revenue anticipated to be up 17.5% for the first
quarter, versus estimated industry growth of between 5% and 6%
* Heart 106.2 overtakes Capital's 95.8 as London's most listened to
commercial station
* LBC 97.3 delivers a 48% improvement in reach post frequency switch to
FM
* Chrysalis Music Publishing success with 'OutKast' 'Speakerboxxx/The
Love Below' Album - entered US Billboard charts at No 1, selling over
1.4m albums in the first 6 weeks post release
* Chrysalis Books Group trading in line with budget
Commenting on the results, Chris Wright, Chairman, said,
'This has been another good year for Chrysalis Group, evidenced by continued
outperformance from our radio and music businesses and strong progress in the
execution of our corporate strategy.'
Richard Huntingford, Chief Executive, said,
'The encouraging start to the new financial year - particularly from our radio
division - puts us in a great position to deliver strong earnings growth for
shareholders. Our strong balance sheet and proven management track record
positions us well to capitalise on any opportunities that may arise in the newly
deregulated media environment.'
Enquiries:
Chrysalis Group Plc
Richard Huntingford, Group Chief Executive 020 7470 1057 or 07802 793 444
Nigel Butterfield, Group Finance Director 020 7465 6243
Harriet Finney, Corporate Communications Director 020 7465 6272 or 07811 370 957
Buchanan Communications
Mark Edwards and Bobbie Swanson 020 7466 5000
Analyst Meeting: 9.30am
Press Meeting: 11.00am
Venue: Dresdner Kleinwort Wasserstein
20 Fenchurch Street
London EC3P 3DP
CHAIRMAN'S STATEMENT
I am delighted to report another good year for Chrysalis Group, evidenced by
continued industry outperformance from our radio division, excellent results
from our music and television businesses and strong progress in the execution of
our corporate strategy.
Group Financial Review
Chrysalis Group has once again been able to deliver an excellent set of
financial results for shareholders in the 12 months ended 31st August 2003. As
anticipated, the reported results for the group reflect the dilution to the
radio division's operating results following the #24.5m acquisition of LBC made
in September 2002 and the subsequent re-launch of the two stations in January
2003. These results also take account of the action taken to address
non-recurring issues within the Chrysalis Books division following the new
management team's operational review. The results for the Chrysalis Television
division, disposed of on 29th August 2003, are included for the full year.
Following the disposal of the Chrysalis Television division, a special dividend
of 5p was paid to shareholders in September 2003. In addition to this, the
record level of profitability achieved by Chrysalis Group in the 2003 financial
year, has enabled us to increase the final dividend per share by 53.8% to 1.0p.
The progressive introduction of a higher level of dividend payment is testament
to Chrysalis Group becoming a company with reliable cashflows and sustainable
levels of profitability. The final dividend will be paid on 7th April 2004 to
shareholders on the register on 12th March 2004.
Unaudited Results 2003 2002 +/-
Group Turnover #246.0m #235.4m +4.5%
Group Operating Profit #10.4m #10.5m -1.0%
Exceptional Profit/Loss #18.6m #(0.3)m
Profit before Tax #23.9m #5.8m + 314%
Basic EPS 13.59p 3.41p +299%
Dividend 1.0p 0.65p +53.8%
Net Debt #28.5m #42.8m*
* 2002 net debt excludes #16.8m of non interest bearing ringfenced sale and leaseback deposits relating to Chrysalis
Television
Results: excluding goodwill amortisation and exceptional items
EBITA #14.2m #13.4m +6.0%
Profit before Tax #8.4m #7.6m +9.8%
EPS 4.27p 4.53p -5.7%
Results: excluding first year losses from LBC
Revenues #242.6m #235.4m +3.0%
EBITA #18.1m #13.4m +35.6%
Group Operating Profit #15.5m #10.5m +46.8%
RADIO
Chrysalis Radio has had an excellent year, once again demonstrating the
division's ability to outperform its industry peers. Operationally it has been
an exciting year for Chrysalis Radio with the acquisition, integration and
re-launch of the two LBC stations in conjunction with further healthy growth
from both the Heart and Galaxy networks.
Chrysalis Radio 2003 2002 +/-
Revenues #56.1m #49.1m + 14.1%
EBITA #9.4m #9.9m -5.0%
EBIT #8.0m #9.4m -15.4%
Chrysalis Radio: like-for-like, excluding results of LBC & disposal of Galaxy 101
Revenues #52.5m #46.6m + 12.4%
EBITA #13.3m #10.2m +31.1%
EBIT #13.0m #9.7m + 34.2%
It is worth noting that the double-digit revenue growth delivered by Chrysalis
Radio was achieved against a background of continued uncertainty in the radio
marketplace and the broader advertising market; industry growth for the period
is believed to have been in the region of 3%. In past years, audience growth
has been the key driver of revenues for Chrysalis but this is beginning to
lessen in importance for the Heart and Galaxy stations where improvements in
yield have been responsible for the majority of this year's 12.4% like-for-like
growth in revenues across the two networks. Good progress made in the area of
sponsorship and promotion has also added to the overall outperformance of the
radio group, with like-for-like revenues from this area increasing by 13% in the
period, compared to industry growth of approximately 2% over the period.
In four out of five of our regions, (London, West Midlands, Yorkshire & North
East), Chrysalis Radio now operates the most listened to commercial stations. We
are confident that these leading market positions, coupled with further
listening growth for many of our stations, particularly LBC and Heart 106.2 in
London, will allow us to deliver further increases in yields and enable
Chrysalis Radio to continue to outperform the industry.
Heart and Galaxy
Our Heart and Galaxy networks have had an excellent 12 months. Heart 106.2, our
flagship station, is now London's most listened to commercial station; the first
time that Capital 95.8's leading London position has been toppled in 30 years.
In the key advertising demographic, 25-44 year olds, Heart 106.2 is now the
number one commercial station in London for three key audience metrics, namely
reach, market share and total listening hours.
Our Galaxy network has also continued to perform well. The latest Rajar survey,
released on 23rd October 2003, showed that our Galaxy network continues to reach
over 50% of all 15-24 year olds in its markets, with a market share of over 20%.
Galaxy 105 (Yorkshire) and Galaxy 105-106 (Northeast) are now both the number
one commercial radio stations in terms of reach and hours in their regions. All
four Galaxy stations have also benefited from continued refinement of their
programming and a period of intense and highly targeted marketing in the second
half of the year.
LBC
The acquisition of the two London LBC stations in September 2002 has
significantly strengthened Chrysalis Radio's position in the key London market.
Following the most recent audience figures from Rajar, Chrysalis Radio London,
(Heart 106.2, LBC 97.3 and LBC 1152), is comfortably the number two London radio
sales network, by market share, with 22.8 million listening hours, equating to
18.7% of the London commercial market.
Following the re-launch of LBC 97.3 on the FM frequency in January 2003, reach
has increased by 48%, with listening hours up by 12%. Importantly, the recent
Rajar survey also indicated that the move towards attracting a younger
demographic is proving to be successful, with almost 40% of the audience now
represented by under 45s, up from 28% at the time of the re-launch. This
progress is key to driving increased advertising revenue and yield in line with
our development plan set at the time of the acquisition. The programming of the
two stations has been fine-tuned over the year and we are delighted that LBC has
been able to attract a number of household names across all areas of the
schedule. In particular, a recent high profile change has been made to the
drive time show, where Henry Kelly has joined us from Classic FM . The station
is currently being heavily marketed in order to further increase audiences. The
talent we have within the stations was recognised at the NTL Commercial Radio
awards in June, when Nick Ferrari won the 'NTL Commercial Presenter of Year
Award', and Douglas Cameron received the 'NTL Commercial Radio Special Award',
recognising his contribution to radio broadcasting over the past three decades.
The significant progress made in increasing audience share and raising the
profile of the two stations has helped in attracting a raft of new national
advertisers to the stations, including Unilever, Associated Newspapers and Coca
Cola.
Digital Radio
The 2003 financial year saw the completion of the first phase of our digital
strategy: Chrysalis Radio is now represented across all of the UK's key
metropolitan markets with a variety of services appealing to a wide range of
listeners. Carriage has been secured for all our analogue brands on digital for
at least 12 years. Our three music brands, Heart, Galaxy and the Arrow, now
cover 29m listeners across the UK, almost 60% of the total adult population.
Both LBC stations are available on the London 1 multiplex, and the AM news
service particularly benefits from the audio quality upgrade offered by digital.
In addition, all of our brands are now available nationally on the Sky Digital
platform. Chrysalis Radio will receive its first set of national digital
audience figures on 29th January 2004.
The costs associated with our digital strategy for the financial year amounted
to #2.1m (2002: #1.8m), all of which have been expensed in the profit and loss
account.
MUSIC
Chrysalis Music, comprising our publishing, recording and wholesale distribution
companies, has once again delivered excellent results in spite of the ongoing
industry issues surrounding piracy and downloading.
Chrysalis Music 2003 2002 +/-
Revenues #71.4m #63.8m +12.0%
EBITA #3.8m #2.1m +86.8%
EBIT #3.4m #1.8m +90.1%
NPS #9.3m #8.5m +9.4%
Music Publishing
The 2003 financial year has seen the completion of the Music Publishing
division's period of investment in its overseas offices. The restructuring of
the US office has allowed us to replicate the proven business model of the UK
operation, enabling us in particular to exploit the growing area of
synchronisation within the lucrative US market. In addition to this, the
acquisition of the Crusaders' catalogue, made in February 2003 for a total
consideration of #3.2m, has been successfully integrated and its performance for
the first six months under Chrysalis's ownership has been extremely positive.
For the 5th successive year the Group has significantly increased its Net
Publisher's Share, 'NPS'. The 9.4% growth in NPS to #9.3m has been driven by
improvements from all areas of revenue generation for the division. In absolute
terms, mechanical revenues increased as a number of Chrysalis writers have been
involved in well-received new releases during the period and now account for 46%
of the NPS. Notably Chrysalis Music has had an interest in 9 US Billboard number
one albums over the past 12 months, whilst David Gray continues to be
represented in the UK album charts and our French subsidiary had its first
number one hit single with a French girl band formed from the TV series '
Popstars'.
Performance income has been gaining in importance with the increase in the
worldwide number of music outlets, as well as a renaissance in live music.
Performance also benefits from the slightly more favourable global advertising
market, as a large part of the income earned in this area is a percentage of
advertising revenues generated by radio stations and music television channels.
Performance income represents 30% of the current year NPS.
Synchronisation has shown the greatest year-on-year improvement and now accounts
for 24% of NPS, up from 19% in the prior financial year. Synchronisation
continues to be buoyed by the widespread use of popular music by the
advertising, film and computer/video games industries. Important
synchronisations in the 2003 financial year have been the use of 'My Way' by
both AXA and Ebay for long running campaigns in the US, 'You were the last high'
by the Dandy Warhols in the latest 'Tomb Raider' film and, in France, Cacherel
has used one of our UK songwriters, Ilya, for its latest advertising campaign.
In addition to these traditional sources of income, the proliferation of the '
ring tone' market, music DVDs and legitimate downloads have begun to offer new
avenues of growth for the division. Chrysalis Music will continue to be active
in exploring and exploiting these new methods of delivering music to the
consumer.
Lasgo Chrysalis
Lasgo Chrysalis has also performed strongly during the year ended 31st August
2003. Revenues for the company increased by 27.7% in the period. Capacity at
the distributor has been increased, enabling Lasgo to respond rapidly to the
increased demand for DVD titles, a product area that saw sales almost treble
over the course of the year. The focus on overheads at Lasgo has remained tight,
enabling the company to double levels of profitability during the financial
year.
Music Recording
The financial year ended 31st August 2003 has been the most successful in Echo,
our recording company's history. The label has had particular success with
Feeder, who now have reached Platinum status for their last two albums, Comfort
in Sound and Echo Park. Moloko have also received a good reception both in the
UK and Europe in particular. In addition The Stands, a new act, have already
achieved two top 40 chart entries since their signing to the Echo label in May
2003.
BOOKS
As highlighted at the interim results in May, the 2003 financial year has been a
period of restructuring for the Chrysalis Books division. The new management
team has completed its operational review of the business, which resulted in a
number of non-recurring costs including redundancies, relocation of the
operations, re-evaluations of stock and work in progress and other balance sheet
provisions, all of which have impacted on the profitability of the division.
2003 2002 +/-
Chrysalis Books
Revenues #30.7m #33.9m -(9.3)%
EBITA #(1.6)m #3.7m
EBIT #(2.3)m #3.0m
The changes implemented by the new management team were wide ranging. The
division is now structured under an umbrella brand 'Chrysalis Books Group' which
comprises three distinct publishing entities, Trade, Contract and Children's, as
well as the Promotional division, which concentrates on publishing services.
Experienced management teams have been put at the head of each of these
divisions and are responsible for implementing the changes made to the
operational procedures and financial controls.
The increased focus on areas of key competence has resulted in a consolidation
of the number of publishing imprints - from seventeen to eight by the end of the
financial year. This has allowed Chrysalis Books to better exploit the rich
intellectual property and creative talent that the company possesses. It has
also brought about a more structured approach to publishing by limiting the
number of new books published, concentrating more effort on each title and
generating more co-edition activity, thereby offsetting as much risk as
possible. There has also been an increased emphasis on creating value through
the introduction of 'series' based titles, as well as more vigorous selling of
the back list.
The operating procedures of the division have also been reviewed and new
centralised distribution agreements have been put in place, with a few key
partners worldwide. In the UK, for example, all distribution is now handled by
Harper Collins Distribution. Likewise, the number of printers with whom we work
has been reduced, leading to improved terms of trade.
While this has been a difficult year for the division, the controls that have
been implemented as a result of the restructuring have laid a solid foundation
for the recovery of Chrysalis Books. We feel confident that the changes made by
the new management team over the past 12 months will enable the division to
return to profitability unencumbered by legacy issues, enabling us to realise
value for shareholders over the medium term.
TELEVISION
The results for the Chrysalis Television division, disposed of on 29th August
2003, have been included for the full 12 months of the 2003 financial year. The
near doubling of profits for the division is attributable to both the full
strategic review that took place in the previous financial year, in which a
greater focus was placed on achieving industry margin targets, combined with an
unusually high level of repeat income from the Midsomer Murders series. The
division also benefited from the final tranche of sale and leaseback subsidies.
Chrysalis Television 2003 2002 +/-
Revenues #87.0m #88.9m -(2.2)%
EBITA #7.3m #4.3m +71.0%
EBIT #6.6m #3.6m +86.2%
The disposal of the television activities to an MBI Group, backed by Bridgepoint
Capital Ltd, was announced on 31st July 2003 and completed on 29th August 2003.
The successful restructuring of the division was fully reflected in the #50.8m
sale price achieved, which comprised an initial payment of #45m with further
payments of #5.8m scheduled to be paid over the course of 36 months post the
completion of the deal. The first instalment of the deferred payment, amounting
to #1.8m, was received in October 2003.
OUTLOOK
Chrysalis has had an excellent start to the new financial year, with trading
across all divisions in line with current expectations.
Chrysalis Radio has continued to experience buoyant trading in the first quarter
of the 2004 financial year, with revenues for the division up an estimated
17.5%, compared to the industry, which we believe to be trading between 5% and
6% up over the corresponding period. Recent audience figures - particularly
Heart 106.2 becoming the most listened to commercial station in the London
market - ongoing improvements in yield, and the progress made to date at LBC,
give us confidence that we should be able to deliver another year of industry
outperformance and margin improvement. This will ensure that we are in the
strongest possible position to capitalise on any opportunities that may arise in
the newly deregulated media environment.
Similarly, we believe that Chrysalis Music is better placed than ever before to
maintain its industry outperformance. The completion of our global publishing
footprint puts us in a great position to attract and retain talent, in an
industry overshadowed by corporate activity among the music majors, as well as
the ongoing pressures of piracy and downloading. Lasgo Chrysalis continues to
benefit from the rapidly increasing penetration of DVD hardware in the European
market.
Following the year of restructuring at Chrysalis Books, the division has started
the 2004 financial year fully equipped to meet the operational and financial
targets set internally. Chrysalis Books Group, under its new umbrella structure,
was well received at the Frankfurt Book Fair in October and with a more focused
line up of front list titles scheduled for release during the current financial
year, we feel confident that the division will meet management expectations.
Overall, I am confident that shareholders can look forward to another year of
strong growth and positive cash flows from the Group.
Chris Wright
Chairman
17th November 2003
CHRYSALIS GROUP PLC
UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31st AUGUST 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Audited
Year
ended Year ended
31st 31st
Continuing Discontinued August Continuing Discontinued August
Operations Operations 2003 Operations Operations 2002
Note #'000 #'000 #'000 #'000 #'000 #'000
Turnover (including acquisitions and
disposals)
Group and share of joint ventures and 162,219 87,740 249,959 151,076 89,899 240,975
associates
Less: share of joint ventures and associates (3,878) (67) (3,945) (4,373) (1,193) (5,566)
Group turnover 2,3 158,341 87,673 246,014 146,703 88,706 235,409
Operating costs before depreciation and (149,108) (79,781) (228,889) (134,602) (84,764) (219,366)
amortisation
Depreciation of tangible fixed assets (2,837) (1,091) (3,928) (2,902) (912) (3,814)
Net amortisation of intangible assets and (2,444) (641) (3,085) (1,129) (462) (1,591)
acquired goodwill
Group operating costs (154,389) (81,513) (235,902) (138,633) (86,138) (224,771)
Other operating income - 969 969 - 1,130 1,130
EBITDA 2 9,233 8,861 18,094 12,101 5,072 17,173
EBITA 2 6,396 7,770 14,166 9,199 4,160 13,359
Group operating profit (including 4 3,952 7,129 11,081 8,070 3,698 11,768
acquisitions and disposals)
Share of operating results of joint venture (566) (54) (620) (1,036) (130) (1,166)
companies
Share of operating results of associated (45) - (45) (80) - (80)
undertakings
Total operating profit: Group and associates
and share of joint ventures 3,341 7,075 10,416 6,954 3,568 10,522
Non operating items:
Exceptional profits/(losses) on disposals of
fixed asset investments 5 8,267 10,361 18,628 (264) - (264)
Profit before interest and tax 11,608 17,436 29,044 6,690 3,568 10,258
Interest receivable and similar income 1,125 1,151
Interest payable and similar charges (6,244) (5,633)
Profit on ordinary activities before 2,3 23,925 5,776
taxation
Taxation 6 (1,228) (330)
Profit on ordinary activities after taxation 22,697 5,446
Minority interests (equity interests ) (23) 228
Profit for the financial year 22,674 5,674
Dividends (10,006) (1,082)
Retained profit for the financial year 12,668 4,592
Basic earnings per share 7 13.59p 3.41p
Diluted earnings per share 7 13.57p 3.40p
Proposed final dividend per share 1.0p 0.65p
Special Dividend per share (paid 8th September 2003) 5.0p -
As detailed in Note 4, turnover includes #3,473,000 derived from acquisitions
and #169,000 relating to disposed businesses within continuing operations.
Group operating profit includes operating losses of #5,018,000 derived from
acquisitions and operating profits of #41,000 relating to disposed businesses
within continuing operations.
EBITDA comprises earnings before interest, tax, depreciation and amortisation.
EBITA comprises earnings before interest, tax and amortisation.
The historical cost profit is the same as that shown above.
CHRYSALIS GROUP PLC
UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31st AUGUST 2003
CONSOLIDATED BALANCE SHEET
Audited
As at As at
31st August 31st August
2003 2002
Note #'000 #'000
Fixed assets
Intangible assets - Media rights and
positive goodwill 51,226 32,738
Intangible assets - Negative goodwill - (96)
51,226 32,642
Tangible assets 19,350 21,634
Investments
Investments in joint venture companies
Share of gross assets 5,526 7,174
Share of gross liabilities (1,310) (2,020)
4,216 5,154
Investments in associated undertakings 97 133
Trade investments 5 5
4,318 5,292
74,894 59,568
Current assets
Stocks 16,010 12,060
Debtors 54,693 60,418
Investments 1,020 1,296
Cash at bank and in hand 8 36,591 44,078
108,314 117,852
Current liabilities
Creditors falling due within one year (72,193) (88,012)
Net current assets 36,121 29,840
Total assets less current liabilities 111,015 89,408
Creditors falling due after one year (52,727) (67,829)
Provisions for liabilities and charges (2,367) (3,048)
Net assets 55,921 18,531
Capital and reserves
Called up share capital 3,352 3,352
Share premium account 9 61,957 61,957
Other reserves 9 741 741
Profit and loss account 9 (9,966) (47,582)
Shareholders' funds (equity interests ) 56,084 18,468
Minority interests (equity interests ) (163) 63
55,921 18,531
CHRYSALIS GROUP PLC
UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31st AUGUST 2003
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Audited
Year ended Year ended
Consolidated statement of total recognised gains and losses 31st August 31st August
2003 2002
#'000 #'000
Profit for the financial year 22,674 5,674
Foreign exchange gains 18 80
Total recognised gains in the year 22,692 5,754
Audited
Year ended Year ended
Reconciliation of movements in shareholders' funds 31st August 31st August
2003 2002
#'000 #'000
Profit for the financial year 22,674 5,674
Dividends (10,006) (1,082)
Retained profit for the year 12,668 4,592
Foreign exchange gains 18 80
Recycling of goodwill previously written off to reserves 24,930 -
New share capital subscribed - 8
Share premium on shares issued during the year - 500
Net addition to shareholders' funds arising in the year 37,616 5,180
Shareholders' funds at beginning of year 18,468 13,288
Shareholders' funds at end of year 56,084 18,468
CHRYSALIS GROUP PLC
UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31st AUGUST 2003
CONSOLIDATED CASH FLOW STATEMENT
Audited
Year ended Year ended
31st August 31st August
Note 2003 2002
#'000 #'000
Operating cash inflow before exceptional items 5,039 9,544
Exceptional inflow on restructuring of television rights 5,276 8,260
Cash inflow from operating activities 10 10,315 17,804
Dividends received from joint venture companies 254 42
Returns on investments and servicing of finance
Interest received 1,068 1,151
Interest paid (6,235) (5,181)
Interest element of finance lease payments (77) (177)
Net cash outflow from returns on investments and servicing of finance (5,244) (4,207)
Taxation paid (937) (525)
Capital expenditure and financial investment
Payments to acquire intangible fixed assets (3,319) (11)
Payments to acquire tangible fixed assets (4,846) (5,391)
Receipts from sales of tangible and intangible fixed assets 427 1,300
Net payments to acquire current asset investments (824) -
Loans from joint venture companies (320) (54)
Net cash outflow from capital expenditure and financial investment (8,882) (4,156)
Acquisitions and disposals
Purchases of subsidiary undertakings 11 (25,224) (6,371)
Cash acquired with subsidiary undertakings - 712
Sale of subsidiary undertakings 57,324 -
Sale of associated undertakings 500 742
Purchases of associated undertakings - (674)
Net cash inflow/(outflow) from acquisitions and disposals 32,600 (5,591)
Equity dividend paid (1,086) (914)
Cash inflow before use of liquid resources and financing 27,020 2,453
Management of liquid resources
Net movement of liquid resources (5,276) (8,260)
Financing
Issue of ordinary share capital - 508
New borrowings 7,500 11,500
Repayment of borrowings (2,391) (2,044)
New finance lease borrowings (net of repayments) 416 (159)
Net cash inflow from financing 5,525 9,805
Increase in cash in the year 10 27,269 3,998
CHRYSALIS GROUP PLC
UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31st AUGUST 2003
NOTES TO THE FINANCIAL INFORMATION
1 The financial information set out above does not constitute the
company's statutory accounts for the years ended 31st August 2003 and 31st
August 2002. The comparative figures for the year ended 31st August 2002 are
derived from the company's statutory accounts for that financial year which have
been reported on by the company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985. The statutory
accounts for the year ended 31st August 2003 will be finalised on the basis of
the financial information presented by the directors in this unaudited
preliminary financial announcement and will be delivered to the Registrar of
Companies following the company's annual general meeting.
2 Segmental analysis by class of business
Turnover EBITDA EBITA Profit/(loss)
before tax
Year ended Year Year Year
31st Aug ended ended ended
Year ended Year ended 2003 Year ended 31st Aug Year ended 31st Aug 31st Aug
31st Aug 31st Aug 31st Aug 2003 31st Aug 2003 2002
2003 2002 2002 2002
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Radio - Analogue
(excluding LBC) 51,436 48,141 16,529 12,900 15,471 11,595 15,116 11,201
- LBC 3,451 - (3,751) - (3,944) - (5,035) -
- Digital 1,158 980 (2,091) (1,664) (2,091) (1,664) (2,111) (1,779)
56,045 49,121 10,687 11,236 9,436 9,931 7,970 9,422
Music 71,424 63,786 4,081 2,270 3,835 2,053 3,426 1,802
TV Group (Discontinued) 86,995 88,946 8,418 5,189 7,329 4,286 6,629 3,561
Books 30,689 33,853 (1,180) 3,997 (1,566) 3,671 (2,261) 3,025
Other* 4,806 5,269 13 (1,228) (155) (1,618) (635) (2,324)
Corporate - - (3,925) (4,291) (4,713) (4,964) (4,713) (4,964)
249,959 240,975 18,094 17,173 14,166 13,359 10,416 10,522
Exceptional profits/
(losses) on disposals of
fixed asset investments
and disposal/ termination
of New Media Operations - - - - - - 18,628 (264)
Net interest payable - - - - - - (5,119) (4,482)
Less: share of joint - -
ventures and associates (3,945) (5,566) - - - -
246,014 235,409 18,094 17,173 14,166 13,359 23,925 5,776
*Other businesses include new media businesses which were previously disclosed
separately. In the year ended 31st August 2003, the Group's share of turnover
of joint venture new media businesses was #1,482,000 (2002: Group turnover of
#254,000 and Group share of turnover of joint venture new media businesses of
#932,000). The loss before tax of new media businesses including the Group's
share of losses of joint venture new media businesses was #482,000 (2002: losses
of #2,474,000).
3 Segmental analysis by geographic origin
Turnover Profit/(loss) before tax
Year ended Year ended Year ended Year ended
31st Aug 31st Aug 31st Aug 2003 31st Aug
2003 2002 2002
#'000 #'000 #'000 #'000
United Kingdom 189,026 189,565 29,424 10,167
North America 9,823 9,132 (690) 421
Europe 35,843 27,833 561 568
Rest of the world 11,322 8,879 414 348
246,014 235,409 29,709 11,504
Net interest payable - - (5,119) (4,482)
Less: share of joint ventures and associates - - (665) (1,246)
246,014 235,409 23,925 5,776
4 Group operating profit/(loss) - continuing operations
Continuing operations Continuing operations
Year ended Year
31st Aug Ongoing ended 31st
Ongoing Acquisitions Disposals 2003 Disposals Aug 2002
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Group turnover 154,699 3,473 169 158,341 145,927 776 146,703
Cost of sales (90,333) (390) (56) (90,779) (81,450) (703) (82,153)
Gross profit 64,366 3,083 113 67,562 64,477 73 64,550
Net operating expenses:
Distribution
and marketing costs (11,128) (1,034) (17) (12,179) (12,180) - (12,180)
Administrative expenses (44,309) (7,067) (55) (51,431) (44,254) (46) (44,300)
Group
operating profit/(loss) 8,929 (5,018) 41 3,952 8,043 27 8,070
5 Non operating exceptional items
Year ended Year ended
31st Aug 31st Aug
2003 2002
#'000 #'000
Exceptional profits on disposals of fixed asset investments - continuing radio
operations 8,267 -
Exceptional profits/(losses) on the disposal of fixed investments - discontinued TV
and Direct book marketing operations 10,361 (183)
Exceptional profit on disposal of fixed investments - continuing music operations - 478
Exceptional losses on the disposal/termination of New Media Operations - (559)
18,628 (264)
6 Taxation
Year ended Year ended
31st Aug 31st Aug
2003 2002
#'000 #'000
UK Corporation tax
Current tax on income for the year 856 -
Adjustments in respect of prior year 95 9
951 9
Foreign tax
Current tax on income for the year 359 172
Withholding taxes 84 148
Total current tax 1,394 329
Deferred tax (166) -
Share of joint ventures' tax - 1
1,228 330
The current tax charge is lower than the standard rate of corporation tax in the
UK. The differences are explained below:
Year Year
ended ended
31st Aug 31st Aug
2003 2002
#'000 #'000
Profit before tax 23,925 5,776
UK Corporation tax at 30% (2002: 30%) 7,178 1,733
Utilisation of tax losses brought forward from prior years (1,057) (2,091)
Expenses not deductible for tax purposes 939 369
Income not chargeable to tax (44) (433)
Capital gains not chargeable to tax (6,060) -
Higher rates of corporation tax on overseas profits - 122
Depreciation charges in excess of capital allowances - 180
Capital allowances in excess of depreciation charges (622) -
Losses not available for use in the current year 965 121
Losses of associates not available to the Group - 319
Adjustments in respect of prior years 95 9
1,394 329
7 Basic and diluted earnings per share
Year Year
ended ended
31st Aug 31st Aug
2003 2002
#'000 #'000
Profit after taxation and minority interests #22,674,000 #5,674,000
Weighted average number of shares in issue (million) 166.9 166.3
Basic earnings per share 13.59p 3.41p
Diluted earnings per share 13.57p 3.40p
The weighted average number of shares in issue used in the calculation of basic
earnings per share for the year has been adjusted for shares held by the
Chrysalis Employee Share Ownership Plan Trust. The diluted earnings per share
for the year, adjusts the basic earnings per share figure for the effect of
dilutive options. The weighted average number of shares used in the calculation
of the diluted earnings per share calculation was 167.1 million (31st August
2002: 166.9 million).
8 Cash at bank and in hand
Cash balances do not include #30.6 million (2002: #9.1 million) of funds which
have been used to offset overdrafts and short term borrowings. Cash at bank and
in hand also includes #5.5 million (2002: #6.1 million), which was held
temporarily in collection accounts ahead of the payment of interest on
securitisation borrowings on 10th September 2003. As at the comparative balance
sheet date of 31st August 2002, cash at bank and in hand included a total of
#16.8 million held in trust accounts securing other creditors of #16.8 million
under the terms of agreements for the financial restructuring of certain of the
Group's television rights under the government-backed film financing initiative.
9 Reserves
Share Other Profit &
premium reserves loss account
#'000 #'000 #'000
Reserves as at 1st September 2002 61,957 741 (47,582)
Retained profit for the period - - 12,668
Reinstatement of goodwill previously written off to reserves - - 24,930
Foreign exchange gains - - 18
Reserves as at 31st August 2003 61,957 741 (9,966)
10 Notes to the consolidated cash flow statement
(i) Reconciliation of operating profit to operating cash flows
Year Year
ended ended
31st Aug 31st Aug
2003 2002
#'000 #'000
Group operating profit before exceptional items 11,081 11,768
Depreciation charges 3,928 3,814
Amortisation charges 3,085 1,591
Loss/(profit) on sale of fixed assets 145 (20)
Provisions utilised (566) (465)
Increase in stocks (6,171) (3,157)
Decrease/(increase) in debtors (9,535) 1,373
Other increase/(decrease) in creditors 3,072 (4,638)
Increase in other creditors 5,276 8,260
Cash impact of exceptional item - (722)
Net cash inflow from operating activities 10,315 17,804
(ii) Reconciliation of net cash flow to movement in net borrowings
Year Year
ended ended
31st Aug 31st Aug
2003 2002
#'000 #'000
Increase in cash in the year 27,269 3,998
Net cash inflow from borrowings (5,109) (9,456)
Cash (inflow)/outflow in respect of net new lease
borrowings (416) 159
Increase/(decrease) in net funds resulting from 21,744 (5,299)
cash flows
Net cash acquired with subsidiaries - 712
Net cash disposed of with subsidiaries (7,268) -
Non cash movements (189) (122)
Translation differences (73) 5
Decrease/(increase) in net borrowings in the year 14,214 (4,704)
Net borrowings brought forward (42,788) (38,084)
Net borrowings carried forward (28,574) (42,788)
10 Notes to the consolidated cash flow statement (continued)
(iii) Analysis of net indebtedness
At At
1st Sept Non cash Exchange 31st Aug
2002 Cashflow items Disposals movements 2003
#'000 #'000 #'000 #'000 #'000 #'000
Liquid resources - cash deposits
(see Note 8) 16,760 5,276 - (22,036) - -
Cash 27,318 17,914 - (8,568) (73) 36,591
Cash at bank and in hand 44,078 - 36,591
Bank overdrafts (14,339) 9,355 - 1,239 - (3,745)
Increase in cash in the year 27,269
Bank term loan (654) 654 - - - -
Securitisation borrowings (43,939) (7,500) (189) - - (51,628)
Other borrowings (9,909) 1,737 - - - (8,172)
Finance leases (1,267) (416) - 61 - (1,622)
Net cash disposed of with
subsidiaries (7,268)
Current asset investments 2 - - - - 2
Total (26,028) 27,020 (189) (29,304) (73) (28,574)
11 Corporate acquisitions and disposals
(a) Acquisitions
(i) On 26th September 2002, the Group acquired 100% of London News Radio
Limited for a cash consideration of #24.5 million (including a payment of #0.7
million for net assets and #0.3 million in costs). Provisional goodwill of
#23.8 million arose on the acquisition.
(ii) On 3rd December 2002, the Group's former wholly owned Dutch
subsidiary, Chrysalis IDTV Media Group BV, acquired a 50% interest in MMM
Producties BV for a cash consideration of #740,000.
(b) Disposals
(i) On 26th September 2002, the Group disposed of its 100% interest in
Galaxy Radio Wales and the West Limited to Vibe Radio Services Limited for #12.6
million.
(ii) On 23rd May 2003, the Group disposed of its 100% interest in
Greenwich Direct Limited, a direct marketing company within the Chrysalis Books
Division, for a consideration of #0.3 million.
(iii) On 20th June 2003, the Group disposed of its 42% interest in Bridge
FM Limited, for a consideration of #0.5 million.
(ii) On 5th August 2003, the Group announced that it had disposed of the
Chrysalis Television Division for a total consideration of #50.8 million,
including the repayment of approximately #7 million of corporate debt, subject
to shareholder approval. The disposal was completed on 29th August 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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