RNS Number:4915I
ENIC PLC
10 March 2003
Embargoed for release 10 march 2003
Enquiries :
Matthew Collecott, Finance Director, ENIC Tel 020 7929 5599
John Bick, Holborn Tel 020 7929 5599
ENIC plc ('ENIC' or the 'Company')
Unaudited interim results for the six months ended 31 December 2002
ENIC plc today announces unaudited interim results for the six months ended 31
December 2002.
Chairman's Statement
We have continued with our policy of rationalising the Group's portfolio of
investments. For the six months ended 31 December 2002, Group turnover was #4.8
million (2001: #15.2 million), and pre-tax losses were #9.4 million (2001:
profit of #1 million).
The largest proportion of the Group's assets are connected with the football
sector and in my report to you for the year ended 30 June 2002, I said that the
backdrop to European football had become increasingly difficult. The position
did not improve in the six months under review, nor is it likely to do so in the
foreseeable future. European football, generally, is suffering from lower than
expected sponsorship, merchandising and broadcasting revenues and together with
the Bosman ruling (which enables players to leave clubs free of charge upon
expiry of their contracts) this has resulted in a sharp decline in the prices
achievable in the player transfer market. In addition, the uncertainty
surrounding future media revenues has been illustrated by the collapse of ITV
Digital and the conditions under which other broadcasting contracts will be
renewed have deteriorated.
This difficult environment has had an adverse impact on the finances of all the
clubs in which we are involved. Although a number of them are performing well on
the field (FC Basel is currently second in the Swiss League and has reached the
second group stage of the Champions League; Glasgow Rangers is top of the
Scottish Premier League and reached the first round of the UEFA Cup, Slavia
Prague is top of the Czech domestic league and reached the fourth round of the
UEFA Cup, Vicenza Calcio is currently fifth in Serie B in Italy and AEK Athens
reached the first group stage of the Champions' league and is currently third in
its domestic league) this good performance has not been translated into
satisfactory financial results. Tottenham Hotspur plc (currently ninth in the
Premier League), recently announced its interim results which showed a pre-tax
loss of #8.6 million (31 December 2001: profit of #2.9 million).
In terms of our other businesses, trading conditions continue to be difficult at
Warner Bros. Studio Stores and the WB Stage 16 Restaurant in Las Vegas has now
closed and all arrangements with Warner Bros. Consumer Products terminated.
Since the period end, the Group participated in the share buyback of Paradigm
Media Investments Plc raising #2.8 million and as a result of the reduction in
the issued share capital, the Group now owns approximately 29.9 per cent. of
that company.
Outlook
It was also announced today that a cash offer is being made by Kondar Limited
(of which Daniel Levy is the sole director and in which his family has an
interest) for the entire issued share capital of ENIC. The Offer, which has been
recommended by the Independent Directors of ENIC including myself, Giles
Hargreave and Barbara Thomas, values each ENIC share at 40 pence. In assessing
the Offer, the Independent Directors were mindful that the prospects for the
football sector and stock market in general are uncertain. Further details on
the background to the recommendation are contained in today's separate
announcement by Kondar and the Independent Directors of ENIC.
Stephen Davidson
Chairman
7 March 2003
Independent Review Report to ENIC PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 31 December 2002 which comprises the profit and loss
account, the balance sheet, the cash flow statement and related notes 1 to 10.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review 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 formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are also responsible for ensuring that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 December 2002.
Deloitte and Touche
Chartered Accountants
London
7 March 2003
Notes: A review does not provide assurance on the maintenance and integrity of
the website, including controls used to achieve this, and in particular on
whether any changes may have occurred to the financial information since first
published. These matters are the responsibility of the directors but no control
procedures can provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination of
financial information differs from legislation in other jurisdictions.
Unaudited Consolidated Profit and Loss Account
For the six months ended 31 December 2002
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
31 December 2002 31 December 2001 30 June 2002
#'000 #'000 #'000 #'000 #'000 #'000
Turnover
Continuing operations 2,995 13,892 13,606
Discontinued operations 1,775 1,309 13,114
4,770 15,201 26,720
Operating expenses (8,268) (23,510) (42,286)
Depreciation of tangible fixed assets (65) (600) (815)
Impairment of goodwill and investments - (2,932) -
Amounts written off investments (2,016) - (5,496)
Amortisation of intangible fixed assets (4,912) (2,632) (5,457)
Net profit on player trading 2,698 8,588 8,917
Exceptional costs - - 3,500
Total operating expenses (12,563) (21,086) (41,637)
Operating loss
Continuing operations (7,667) (5,791) (12,979)
Discontinued operations (126) (94) (1,938)
Operating loss (7,793) (5,885) (14,917)
Share of associate's operating (losses)/ (2,531) 776 (3,364)
profit
Profit on sale of investments - 1,842 2,087
Profit on sale of ukbetting.com Ltd - 3,519 3,440
Profit on sale of Warner Bros. Studio - - 2,956
Stores Ltd
(10,324) 252 (9,798)
Net interest receivable 903 794 1,634
(Loss)/profit on ordinary activities (9,421) 1,046 (8,164)
before taxation
Tax on profit on ordinary activities (87) (989) (59)
(Loss)/profit on ordinary activities (9,508) 57 (8,223)
after taxation
Minority interests (equity) 94 260 273
(Loss)/profit for the financial period (9,414) 317 (7,950)
(Loss)/profit per ordinary share - basic (8.98p) 0.3p (7.58p)
(Loss)/profit per ordinary share - (8.98p) 0.3p (7.58p)
diluted
Unaudited Consolidated Balance Sheet
At 31 December 2002
Unaudited at 31 Unaudited at 31 Audited at
December 2002 December 2001 30 June 2002
#'000 #'000 #'000
Fixed assets
Intangible assets 11,479 14,888 14,903
Tangible assets 530 1,577 667
Investments 17,830 25,331 22,372
29,839 41,796 37,942
Current assets
Stock 155 906 183
Debtors 11,962 18,805 18,563
Cash at bank and in hand 28,206 53,446 47,195
40,323 73,157 65,941
Creditors: amounts falling due within one year (16,358) (49,725) (41,110)
Net current assets 23,965 23,432 24,831
Total assets less current liabilities 53,804 65,228 62,773
Creditors: amounts falling due after more than one year (1,467) (2,889) (1,084)
Provisions for liabilities and charges (11,080) (2,335) (10,902)
Net assets
41,257 60,004 50,787
Capital and reserves
Called-up share capital 2,622 2,622 2,622
Share premium account 36,322 36,322 36,322
Capital redemption reserve 1,313 1,313 1,313
Profit and loss account 1,899 20,540 11,335
Shareholders' funds (including non-equity interests) 42,156 60,797 51,592
Minority interests (equity) (899) (793) (805)
Total capital employed 41,257 60,004 50,787
Unaudited Summarised Consolidated Cash Flow Statement
For the six months ended 31 December 2002
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2002 2001 2002
#'000 #'000 #'000
Net cash inflow/(outflow) from operating activities 2,193 (2,485) (2,044)
Net cash inflow from return on investments
and servicing of finance 659 755 1,644
Taxation paid - (482) (485)
Net cash inflow from capital expenditure and financial
investments 88 2,578 312
Acquisitions and disposals (44) 6,473 1,035
Net cash outflow from management of liquid resources and
financing (21,885) - -
(Decrease)/Increase in cash (18,989) 6,839 462
Unaudited Consolidated Statement of Total Recognised Gains and Losses
For the six months ended 31 December 2002
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2002 2001 2002
#'000 #'000 #'000
(Loss)/profit for the financial period (9,414) 317 (7,950)
(Loss)/gains on foreign exchange translation differences (22) 350 (588)
Total recognised (loss)/gains for the period (9,436) 667 (8,538)
Notes to the Interim Results
For the six months ended 31 December 2002
1. Basis of accounting
The interim financial information has been prepared on a basis consistent with
the report and accounts for the year ended 30 June 2002. The financial
information contained in this interim report does not constitute statutory
accounts as defined in section 240 of the Companies Act 1985.
2. Comparative information
ENIC plc has presented unaudited comparative accounts for the 6 months ended 31
December 2001 and the audited accounts for the year ended 30 June 2002. The
financial information for the year ended 30 June 2002 has been extracted from
the statutory accounts which have been reported on by the Group's auditors and
have been delivered to the Registrar of Companies. The Auditors report was
unqualified and did not contain any statement under section 237(2) or (3) of the
Companies Act 1985.
3. Taxation
The taxation charge for the 6 months ended 31 December 2002 is based on the
estimated effective rate for the full year to 30 June 2003 and relates to
overseas taxation charges and associated companies.
4. Dividend
No interim dividend will be paid for the 6 months ended 31 December 2002 (31
December 2001: #nil and 30 June 2002: #nil).
5. Segmental information and geographical analysis
(a) Segmental information
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2002 2001 2002
#'000 #'000 #'000
Turnover by origin and destination
ENIC Sports 2,995 3,889 9,293
ENIC Entertainment 1,775 10,003 16,118
Media, Gaming and Group management - 1,309 1,309
4,770 15,201 26,720
Profit/(loss) on ordinary activities before taxation
ENIC Sports (11,947) (2,326) (13,475)
ENIC Entertainment (72) (1,342) 118
Media, Gaming and Group management 2,598 4,714 5,193
(9,421) 1,046 (8,164)
Net assets
ENIC Sports 17,970 4,779 5,303
ENIC Entertainment (2,540) 1,709 (1,926)
Media, Gaming and Group management 25,827 53,516 47,410
41,257 60,004 50,787
(b) Geographical analysis
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2002 2001 2002
#'000 #'000 #'000
Turnover by origin and destination
UK - 9,317 13,114
Europe 2,995 3,889 9,293
Other 1,775 1,995 4,313
4,770 15,201 26,720
Profit/(loss) on ordinary activities before taxation
UK (3,023) (1,595) (5,477)
Europe (6,468) 36 (7,455)
Other 70 2,605 4,768
(9,421) 1,046 (8,164)
Net assets
UK 17,953 676 130
Europe (206) 14,140 7,167
Other 23,510 45,188 43,490
41,257 60,004 50,787
6. Reconciliation of operating profit/(loss) to operating cash flows
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2002 2001 2002
#'000 #'000 #'000
(Loss)/profit on ordinary activities before interest, taxation (7,793) (524) (6,434)
and associate losses
Impairment of goodwill and investments 2,016 2,932 9,664
Depreciation of tangible fixed assets 65 600 815
Amortisation of intangible fixed assets 4,912 2,632 5,457
Decrease in stock 23 863 284
Decrease in debtors 6,183 10,231 14,293
Decrease in creditors (515) (5,270) (8,723)
Profit on sale of investments - (1,842) (2,087)
Profit on sale of players (2,698) (8,588) (8,917)
Profit on disposal of subsidiaries - (3,519) (6,396)
Net cash inflow/(outflow) from operating activities 2,193 (2,485) (2,044)
7. Analysis of change in net debt
At At
1 July 31 December
2002 Cash flow 2002
#'000 #'000 #'000
Cash in hand and at bank 47,195 (18,989) 28,206
Overdrafts (596) (1,154) (1,750)
46,599 (20,143) 26,456
Debt due within one year (21,885) 21,885 -
24,714 1,742 26,456
8. Profit and loss account
#'000
At 1 July 2002 11,335
Retained profit for the year (9,414)
Foreign exchange translation differences (22)
At 31 December 2002 1,899
9. Investments
The OFEX market value of the investment in The Rangers Football Club plc as at
the close of business on 7 March 2003 was #12.2 million (#1.05 per share), with
a carrying value at 31 December 2002 of #0.4 million.
The market value of the investment in Autonomy Corporation plc as at the close
of business on 7 March 2003 was #4.7 million (#1.58 per share), with a carrying
value at 31 December 2002 of #1 million.
The market value of the investment in Paradigm Media Investments Plc as at the
close of business on 7 March 2003 was #5.3 million (#0.0525 per share), with a
carrying value at 31 December 2002 of #5.2 million.
The market value of the investment in Ukbetting plc as at the close of business
on 7 March 2003 was #1.7 million (#0.285 per share), with a carrying value at 31
December 2002 of #1.5 million.
The market value of the investment in Tottenham Hotspur plc as at the close of
business on 7 March 2003 was #5.2 million (#0.17 per share), with a carrying
value at 31 December 2002 of #9.2 million.
10. Contingent liabilities
ENIC plc continues to indemnify Time Warner Entertainment Limited in respect of
leases acquired with WBSS. The contingent liability under the indemnities
provided by ENIC plc in respect of these leases at 31 December 2002 was #64.1
million over the full term of such leases, of which #9.8 million relates to
leases on stores currently occupied by WBSS and #54.3 million relates to leases
on stores assigned to third parties.
11. Copies of the Interim Report
The interim report has been sent to shareholders today. Copies are available
from the Company's registered office at 748 High Road, London N17 OAP
This information is provided by RNS
The company news service from the London Stock Exchange
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