26 March 2024
Catalyst Media Group
Plc
("CMG",
"Catalyst" or the "Company")
Interim Results for the Six
Months Ended 31 December 2023
The Board of CMG (AIM: CMX) is
pleased to announce the Company's unaudited interim results for the
six months ended 31 December 2023.
CMG is a 20.54% shareholder in
Sports Information Services (Holdings) Limited ("SIS") and the
results include its share in the profits/(losses) of SIS as an
equity accounted associate.
Financial Highlights for the six months to 31 December
2023
·
CMG profit after taxation of £0.77 million (2022:
£0.30 million)
·
Earnings per share of 3.64p (2022:
1.45p)
·
Following payment of a 27p dividend in November
2023, net asset value per share of 151.6p (2022: 170.4p) at the end
of the reporting period
·
For the six months to 30 September 2023, SIS
achieved
-
Revenues of £133.5 million (2022: £125.7
million)
-
Operating profit of £4.6 million (2022: £1.9
million)
-
Profit after tax on ordinary activities of £4.0
million (2022: profit of £1.8 million)
·
On 31 October 2023, the Company received its £6.16
million share of an ordinary and special dividend paid by SIS and
on 21 November 2023 paid an interim dividend of approximately £5.68
million, equating to 27 pence per CMG ordinary share.
SIS's Current Trading and Outlook
SIS's trading remains robust and its
management continues to pursue and win new business opportunities
both in terms of content acquisition, most recently securing new
rights for Korean horseracing, and new customer distribution deals
recently announced with Genius Sports Limited and EveryMatrix for
Competitive Gaming.
In February 2024, SIS launched fixed
odds horseracing in Colorado USA with bet365 following approval by
state authorities. The launch followed the previous launch of
Competitive Gaming in three states including Colorado in calendar
year 2023.
SIS has advised that on 12 March
2024 the board of Racelab Pty Limited, a company based in Australia
in which SIS has a 50% stake, appointed a Voluntary Administrator
following its failure to secure further funding. At this stage, SIS
management are unclear of the likely outcome however it is unlikely
to impact SIS's trading results although will result in a
write-down of the investment in its financial year to 31 March
2024.
Prior to any investment write-down,
SIS has advised CMG that it expects to close its financial year to
31 March 2024 with increased revenue and profit before tax
year-on-year, but noted the likely impact
on next year's profitability of the closure of a particular
customer.
Enquiries:
Catalyst Media Group Plc
Michael Rosenberg, Non-executive
Chairman Mob: 07785 727
595
Melvin Lawson, Non-executive
Director
Tel: 020 7734 8111
Strand Hanson Limited
Tel: 020 7409 3494
James Harris / Matthew
Chandler
The information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended by virtue of the Market Abuse
(Amendment) (EU Exit) Regulations 2019.
Chairman's Statement
For the six-month period ended 31
December 2023, the Company achieved a net profit after taxation of
£0.77 million (2022: £0.30 million).
Net assets as at 31 December 2023
were £31.9 million (30 June 2023: £36.8 million). Net cash as at 31
December 2023 was approximately £0.6 million (30 June 2023: £0.2
million).
CMG's main asset remains its 20.54%
stake in SIS and, in October 2023, the Company received its £6.16
million share of an ordinary and special dividend from SIS. The
value of CMG's investment in SIS has reduced from approximately
£36.6 million as at 30 June 2023 to approximately £31.3 million as
at 31 December 2023, reflecting the impact of such dividend receipt
offset by CMG's share of the profits achieved by SIS in the six
months to 30 September 2023. As a result, CMG's net assets per
share as at 31 December 2023 were 151.6p (2022: 170.4p). The
carrying value of our investment in SIS will be reviewed again at
our financial year end.
CMG equity accounts for its share in
the profit of SIS which was £4.0 million after tax for its
six-month period to 30 September 2023 (2022: £1.8 million). SIS's
revenues for such period were £133.5 million (2022: £125.7 million)
which were derived from its business of providing integrated
television and data services to Licensed Betting Offices in the UK,
Ireland and overseas. SIS generated an operating profit for this
period of £4.6 million, compared to an operating profit of £1.9
million in the comparable period for 2022.
CMG currently has cash reserves of
approximately £0.5 million which is sufficient for its present
requirements.
Set out below is an overview of the
activities of SIS's key divisions for the period under
review.
SIS
- UK and Ireland Retail
SIS continues to provide its core
service including Racecourse Media Group horseracing, the SIS
British Greyhound Service, Irish Horseracing, Chelmsford City
Horseracing, 49's and International Horseracing to almost the
entire UK and Irish retail market, including all the major UK
bookmaking groups and the majority of the independent
market.
SIS supplies its retail services,
production, distribution and content, to the major retail brands on
recently-renewed long term agreements.
In June 2023, SIS strengthened its
long-term position by securing a five-year renewal to the Horse
Racing Ireland and Association of Irish Racecourses' worldwide
Fixed Odds rights.
SIS
- International & Online
SIS has continued to expand its
international reach both in terms of customers and rights
agreements. New racing rights have been secured for horseracing
from South Africa, Australia, Italy, Korea and Poland and a number
of existing international content agreements have been
renewed.
SIS has over 150 live feeds to
customers designed to maximise betting opportunities for
international retail and online operators and has
signed numerous international and online operators to
multi-year agreements. SIS continues to progress its strategy to
increase distribution, in both new and existing international and
online markets, using proprietary production technology as well as
ultra-low latency streaming and data pricing services.
SIS has seen its new US subsidiary,
SIS Content Services Inc., secure licences to supply elements of
its content in five states and has a number of other state
applications in progress and went live with Fixed Odds horseracing
in February 2024.
SIS
- Non-racing content
The SIS Competitive Gaming
(e-sports) service, has seen customer growth in the year and is now
focussing on two sports related titles, e-football, and
e-basketball, following feedback from customers. It provides around
100,000 unique events per annum with plans underway to increase
this number further. The events are supplied to customers in a
number of territories worldwide including three US states where SIS
is currently licenced. In February 2024, SIS signed distribution
deals with Genius Sports Limited and EveryMatrix which will provide
worldwide distribution of the Competitive Gaming events.
49's Ltd, the branded numbers
business, has served to expand SIS's product offering following its
acquisition in 2020 with SIS's product range now including the
original 49's draw, Fast 15's and 39's, plus upgraded virtual
horseracing. In SIS's financial year to 31 March 2023, it also
launched a bespoke draw product, Lotto365, for bet365. Accordingly,
the business now produces over 500,000 draws per annum.
India
An arbitration award was made in
July 2020 which the respondent has paid into court. These funds are
now subject to appeals in the Delhi High Court by both parties: SIS
continues to pursue claims disallowed by the arbitrators whilst the
respondent attempts to nullify the award in its entirety. The
overall outcome therefore remains uncertain.
The legal and associated costs
relating to this claim have been significantly reduced but are
still impacting SIS's profits.
SIS's Current Trading and Outlook
SIS's trading remains robust and its
management continues to pursue and win new business opportunities
both in terms of content acquisition, most recently securing new
rights for Korean horseracing, and new customer distribution deals
recently announced with Genius Sports Limited and EveryMatrix for
Competitive Gaming.
In February 2024, SIS launched fixed
odds horseracing in Colorado USA with bet365 following approval by
state authorities, the launch followed the launches in calendar
year 2023 of Competitive Gaming in three states including
Colorado.
SIS has advised that on 12 March
2024 the board of Racelab Pty Limited, a company based in Australia
in which SIS has a 50% stake, appointed a Voluntary Administrator
following its failure to secure further funding. At this stage, SIS
is unclear of the likely outcome however it is unlikely to impact
SIS's trading results although will result in a write-down of the
investment in its financial year to 31 March 2024.
Prior to any investment write-down,
SIS has advised CMG that it expects to close its financial year to
31 March 2024 with increased revenue and profit before tax
year-on-year.
SIS's cash position as of 11 March
2024 was approximately £13.1 million.
In March 2024, SIS also noted that a
particular customer, had announced that it intends to cease trading
on 31 March 2024. SIS is continuing discussions with such customer
but it is likely to impact profitability in SIS's next financial
year.
Following its total dividend
distribution in October 2023, SIS secured an initial £35 million
banking facility to provide funds for working capital and to
finance growth, including acquisition financing, and the SIS Board
continues to support the company's long term business strategy.
Such banking facility can potentially be increased to £50
million.
CMG
Outlook
The Board of CMG notes the positive
report from SIS that its revenues and profits are expected to show
increased growth for its financial year ending 31 March 2024
compared to the previous year, subject to any one-off investment
write-downs, but also notes the likely impact on next year's
profitability of the closure of a customer. Meanwhile, overheads
for CMG continue to remain at a very low level as in previous
years.
Michael Rosenberg OBE
Chairman
25 March 2024
Consolidated interim statement of comprehensive
income
|
|
Notes
|
6 months to 31 December
2023
£
Unaudited
|
6 months to 31 December
2022
£
Unaudited
|
12 months to 30 June
2023
£
Audited
|
|
|
|
|
|
|
|
Revenue
|
|
12,500
|
12,500
|
25,000
|
|
|
|
|
|
|
|
Cost of sales
|
|
-
|
-
|
-
|
|
Gross profit
|
|
12,500
|
12,500
|
25,000
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(96,739)
|
(77,355)
|
(179,447)
|
|
Operating loss
|
|
(84,239)
|
(64,855)
|
(154,477)
|
|
|
|
|
|
|
|
Financial income
|
|
6,134
|
874
|
2,243
|
|
Net financial income
|
|
6,134
|
874
|
2,243
|
|
|
|
|
|
|
|
Share of profit of equity-accounted
associate
|
3
|
829,405
|
368,077
|
880,174
|
|
Reversal of impairment of
equity-accounted associate
|
|
-
|
-
|
1,856,276
|
|
|
|
|
|
|
|
Profit before taxation
|
|
751,300
|
304,096
|
2,584,246
|
|
|
|
|
|
|
|
Taxation
|
|
15,300
|
-
|
30,300
|
|
|
|
|
|
|
|
Profit for the period
|
|
766,600
|
304,096
|
2,614,546
|
|
|
|
|
|
|
|
Share of other comprehensive profit
of associate
|
|
-
|
-
|
(651,323)
|
|
Total comprehensive income for the
period
|
|
766,600
|
304,096
|
1,963,223
|
|
|
|
|
|
|
|
Attributable to equity holders of
the Company
|
|
766,600
|
304,096
|
1,963,223
|
|
|
|
|
|
|
|
Earnings per share:
|
4
|
|
|
|
|
Basic
|
|
3.64p
|
1.45p
|
12.43p
|
|
Diluted
|
|
3.64p
|
1.45p
|
12.43p
|
Consolidated interim statement of financial
position
|
|
Notes
|
31 December
2023
£
Unaudited
|
31
December
2022
£
Unaudited
|
30 June
2023
£
Audited
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Investment in associate
|
3
|
31,279,687
|
34,894,534
|
36,611,584
|
|
|
|
31,279,687
|
34,894,534
|
36,611,584
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
|
100,834
|
49,555
|
78,668
|
|
Cash and cash equivalents
|
|
608,166
|
936,582
|
174,364
|
|
|
|
709,000
|
986,137
|
253,032
|
|
|
|
|
|
|
|
Total assets
|
|
31,988,687
|
35,880,671
|
36,864,616
|
|
|
|
|
|
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Capital and reserves attributable to
equity holders of the parent
|
|
|
|
|
|
Share capital
|
|
2,103,202
|
2,103,202
|
2,103,202
|
|
Capital redemption reserve
|
|
711,117
|
711,117
|
711,117
|
|
Merger reserve
|
|
2,402,674
|
2,402,674
|
2,402,674
|
|
Retained profits
|
|
26,667,161
|
30,614,210
|
31,579,260
|
|
|
|
31,884,154
|
35,831,203
|
36,796,253
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
104,533
|
49,468
|
68,363
|
|
|
|
104,533
|
49,468
|
68,363
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
31,988,687
|
35,880,671
|
36,864,616
|
Consolidated interim cash flow statement
|
|
|
6 months
to 31 December
2023
£
Unaudited
|
6 months
to 31 December
2022
£
Unaudited
|
12 months
to 30
June
2023
£
Audited
|
|
|
|
|
|
|
|
Cash flow from operating
activities
|
|
|
|
|
|
Profit before taxation
|
|
751,300
|
304,096
|
2,584,246
|
|
Adjustments for:
|
|
|
|
|
|
Share of (profit) from
associate
|
|
(829,405)
|
(368,077)
|
(880,174)
|
|
Reversal of impairment in
associate
|
|
-
|
-
|
(1,856,276)
|
|
Finance income
|
|
(6,134)
|
(874)
|
(2,243)
|
|
Corporation taxes
recovered
|
|
-
|
17,904
|
17,904
|
|
|
|
|
|
|
|
Net cash outflow from operating
activities before changes in working capital
|
|
(84,239)
|
(46,951)
|
(136,543)
|
|
(Increase) / Decrease in trade and
other receivables
|
|
(6,867)
|
(10,506)
|
(9,318)
|
|
Increase / (Decrease) in trade and
other payables
|
|
36,171
|
(3,389)
|
15,505
|
|
|
|
|
|
|
|
Net cash outflow used in operating
activities
|
|
(54,935)
|
(60,846)
|
(130,356)
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
Dividend received
|
|
6,161,302
|
903,543
|
903,543
|
|
Interest received
|
|
6,134
|
874
|
2,243
|
|
|
|
|
|
|
|
Net cash inflow from investing
activities
|
|
6,167,436
|
904,417
|
905,786
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
Dividends paid
|
|
(5,678,699)
|
-
|
(694,077)
|
|
|
|
|
|
|
|
Net cash outflow used in financing
activities
|
|
(5,678,699)
|
-
|
(694,077)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net movement in cash and cash
equivalents in the period
|
|
433,802
|
843,571
|
81,353
|
|
Cash and cash equivalents at the
beginning of the period
|
|
174,364
|
93,011
|
93,011
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end
of the period
|
|
608,166
|
936,582
|
174,364
|
Notes to the interim financial statements
1. Corporate
information
CMG is a company incorporated in
England and Wales and is quoted on the AIM market operated by
London Stock Exchange plc.
2.
Basis of
preparation
These unaudited consolidated interim
financial statements cover the six month period from 1 July 2023 to
31 December 2023 including the financial results of Sports
Information Services (Holdings) Limited ("SIS") for its six month
period to 30 September 2023.
These consolidated interim financial
statements of the Company and its subsidiaries (the "Group") for
the six months ended 31 December 2023 have been prepared in
accordance with accepted International Financial Reporting
Standards (IFRSs), International Accounting Standards (IAS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations (collectively "IFRSs") as adopted for use in the
United Kingdom and as issued by the International Accounting
Standards Board and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The accounting policies adopted for
the preparation of these unaudited interim financial statements are
consistent with the accounting policies adopted in the Group's
financial statements for the year ended 30 June 2023 and will
remain so for the year ending 30 June 2024.
The financial information set out
above does not constitute statutory accounts as defined in section
434 of the Companies Act 2006. Statutory accounts for the year
ended 30 June 2023, on which the report of the auditors was
unqualified and did not contain a statement under section 498 of
the Companies Act 2006, have been filed with the Registrar of
Companies.
New
financial reporting requirements
The Group, including SIS, has
applied the following new financial reporting standards for the
first time in preparing its financial statements for the six month
period ended 31 December 2023. All were effective as of 1 January
2023:
§ Disclosure
of Accounting Policies (Amendments to IAS 1 Presentation of
Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements)
§ Definition
of Accounting Estimates (Amendments to IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors)
§ Deferred
Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12 Income Taxes)
Standards, interpretations and amendments to published
standards not yet effective
At the date of authorisation of
these consolidated interim financial statements, the IASB and IFRIC
have issued the following standards and interpretations which are
effective for annual accounting periods beginning on or after the
stated effective date. These standards are not effective for,
and have not been applied in, the preparation of these consolidated
interim financial statements:
§ General
Requirements for Disclosure of Sustainability-related Financial
Information and Climate-related Disclosures (Amendments to IFRS S1
and S2) (effective as of 1 January 2024)
§ Non-current Liabilities with Covenants and Classification of
Liabilities as Current or Non-current (Amendments to IAS 1)
(effective as of 1 January 2024)
§ Lease
Liability in a Sale and Leaseback (Amendments to IAS 16) (effective
as of 1 January 2024)
§ Supplier
Finance Arrangements (Amendments to IAS 7 and IFRS 7) (effective as
of 1 January 2024); and
§ Lack of
Exchangeability (Amendments to IAS 21) (effective as of 1 January
2025)
The Directors anticipate that the
adoption of these standards will not have a material impact on the
Group's financial statements in the period of initial
adoption.
3. Investment in
associate
|
|
Total
|
|
|
Group
|
|
|
£
|
|
Cost
|
|
|
At 1
July 2023
|
36,611,584
|
|
Additions - share of
profits
|
829,405
|
|
Dividends received
|
(6,161,302)
|
|
|
|
|
At
31 December 2023
|
31,279,687
|
The Group's interest in its
associate, SIS, a company incorporated in England and Wales, is
held by Alternateport Limited ("Alternateport"). Alternateport
holds an investment of 20.54% in the equity share capital of SIS
and, whilst entitled to appoint a director and alternate director
to the SIS board, currently maintains observer rights.
Alternateport is a wholly-owned subsidiary of Catalyst Media
Holdings Limited, a wholly-owned subsidiary of the
Company.
The Board has reviewed its valuation
of the Company's investment in SIS as at 31 December 2023 and has,
in line with the Group's accounting policies, decreased the value
of its investment by the amount of its share of profits for the
period, less the value of the dividend received. As a result, the
investment is now carried at a value of approximately
£31.3m.
|
Share of profit of associate*
|
30 September
2023
|
|
31 December 2023
|
31 December 2022
|
30 June
2023
|
|
|
SIS Total
|
|
CMG share
|
CMG share
|
CMG share
|
|
|
£'000
|
|
£'000
|
£'000
|
£'000
|
|
Revenue:
|
|
|
|
|
|
|
SIS Betting Services
|
133,458
|
|
27,412
|
25,828
|
47,396
|
|
|
|
|
|
|
|
|
Total revenue
|
133,458
|
|
27,412
|
25,828
|
47,396
|
|
|
|
|
|
|
|
|
Operating profit/(loss) from ongoing
operations
|
4,583
|
|
941
|
396
|
1,108
|
|
Group's share of loss in
associate
|
-
|
|
-
|
-
|
(33)
|
|
Net interest receivable /
(payable)
|
845
|
|
174
|
58
|
275
|
|
|
|
|
|
|
|
|
Profit/(loss) before tax
|
5,428
|
|
1,115
|
454
|
1,350
|
|
Taxation
|
(1,390)
|
|
(286)
|
(86)
|
(347)
|
|
Share of income/(loss) after
taxation
|
4,038
|
|
829
|
368
|
1,003
|
|
Net income from associate
|
4,038
|
|
829
|
368
|
1,003
|
|
IFRS 9 expected credit loss
provision
|
-
|
|
-
|
-
|
(123)
|
|
Adjusted net income from
associate
|
4,038
|
|
829
|
368
|
880
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
|
Actuarial gain/(loss)
|
-
|
|
-
|
-
|
(1,498)
|
|
Deferred tax
|
-
|
|
-
|
-
|
524
|
|
Acquisition of a subsidiary and
revaluation loss
|
-
|
|
-
|
-
|
322
|
|
Total other comprehensive
income
|
-
|
|
-
|
-
|
(652)
|
|
|
|
|
|
|
|
|
Share of gross assets and liabilities of
associate
|
|
|
|
|
|
|
Gross assets
|
123,591
|
|
25,386
|
26,972
|
26,774
|
|
Gross liabilities
|
(62,922)
|
|
(12,924)
|
(14,216)
|
(14,938)
|
|
Net equity
|
60,669
|
|
12,462
|
12,756
|
11,836
|
*
- The period covered by the associate's accounts is for the six
months to 30 September 2023. The revenues have been stated
excluding internal revenues.
4. Earnings per
share
The calculation of the basic
earnings per ordinary share of 10p each in the capital of the
Company ("Share") is based upon the following:
|
|
6 months to
31 December
2023
£
|
6 months to
31 December
2022
£
|
12 months to 30
June
2023
£
|
|
Basic and Diluted
|
|
|
|
|
Earnings per share -
pence
|
3.64p
|
1.45p
|
12.43p
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to equity
shareholders
|
766,600
|
304,096
|
1,963,223
|
|
|
|
|
|
|
Weighted average number of Shares in
issue
|
21,032,030
|
21,032,030
|
21,032,030
|
- ENDS
-