TIDMSPMG
RNS Number : 4108R
Sport Media Group PLC
30 April 2009
+------------------------------------------------+-----------------------------------------------+
| Press Release | 30 April 2009 |
+------------------------------------------------+-----------------------------------------------+
SPORT MEDIA GROUP PLC
("Sport Media", "SPMG", "the Group" or "the Company")
Refinancing, termination of Offer Period and
Interim results for the six months to 31 January 2009
Sport Media Group plc (AIM: SPMG.L), the integrated multi-media group that
publishes the Sunday and Daily Sport newspapers, numerous magazines including
'Front' and digital content for internet and mobile channels, today announces
that it has agreed new long term banking facilities, secured additional loan
financing from the existing loan providers and also publishes its interim
results for the six months ended 31 January 2009.
Following the successful agreement of the re-financing the Company confirms that
is no longer in discussions with any third parties that might lead to a
potential offer for the issued share capital of the Company and as a result the
Company is no longer in an Offer Period under the rules of the Takeover Code.
Key Points on Refinancing
+------------------------------------------------------------------------+
| * Agreed renewal and enhancement of existing banking |
| facilities for a further 18 months |
+------------------------------------------------------------------------+
| * Agreed additional loan facilities totalling |
| GBP1.68m from existing loan providers |
+------------------------------------------------------------------------+
| * Issue of 9.68m options over Ordinary Shares of |
| Sport Media at a price of 3.5p each to David Sullivan |
+------------------------------------------------------------------------+
| * David Sullivan to take Honorary Publisher role and |
| assist with efforts to increase circulation and |
| profitability |
+------------------------------------------------------------------------+
| * Implementation of significant cost reduction plans |
| across all areas of business at both fixed and |
| variable cost levels |
+------------------------------------------------------------------------+
Interim Period Trading Summary
+------------------------------------------------------------------------+
| * Turnover down 19% to GBP11.7 million (2008 H1: |
| GBP14.4 million) |
+------------------------------------------------------------------------+
| * Underlying operating profit GBP0.6 million (2008 H1: |
| GBP3.3 million) |
+------------------------------------------------------------------------+
| * Underlying pre-tax profit GBP0.2 million (2008H1: |
| GBP3.2 million) |
+------------------------------------------------------------------------+
| * Adjusted EPS share 0.01p (2008 H1: 2.55p) |
+------------------------------------------------------------------------+
Commenting on the refinancing and Interim results, Andrew Fickling, Chief
Executive Officer, said:
"We are pleased that we have been able to secure the financial position of the
group and attract support and investment for our restructuring plans which we
believe will allow us to take the group forward successfully in what are
challenging economic circumstances. We are grateful for the assistance that has
been provided by all parties in delivering a refinancing structure that
incorporates the interests of all stakeholders, and look forward to the future
with renewed confidence."
For further information, please contact:
+-----------------------------------------+----------------------------------+
| Sport Media Group plc | Tel: +44 (0) 7836 258 558 |
| David Bailey, Chairman | Tel: +44 (0) 161 236 4466 |
| Andrew Fickling, Chief Executive | www.sportmediagroup.co.uk |
| Officer | |
| Andrew Fletcher, Chief Financial | |
| Officer | |
+-----------------------------------------+----------------------------------+
| Daniel Stewart & Company plc | Tel: +44 (0) 20 7776 6550 |
| Simon Leathers / Oliver Rigby | www.danielstewart.co.uk |
+-----------------------------------------+----------------------------------+
Notes to Editors:
Formed by a reverse takeover of Sport Newspapers Limited by Interactive World
plc, SPMG combines an established national newspaper brand with recognised
experience in the delivery of content through digital channels, including both
broadband and mobile.
CHAIRMAN'S STATEMENT
Overview
The Board of Sport Media Group announces the resolution of its financing
negotiations and publishes its results for the six months to 31st January 2009.
The Board is pleased to announce that, subject to formal sign off which is
expected within 5 working days, agreement has been reached between the Group and
its bankers for an extension of current banking facilities for a period of 18
months with immediate effect. The Group has also simultaneously entered into
agreements, also subject to formal sign off which is expected within 5 working
days, with David Sullivan and Gold Group International Limited whereby these
parties have agreed to provide loans, initially for a 18 month period, to the
Group which total GBP1.68m. These loans will enable the Group to effect a
restructuring and re-organisation of the Sport Newspaper business to restore it
to profitability. In return for the provision of these loan facilities, which
have been provided at an interest rate of 6.5% pa, options have been granted
over 9.68m Ordinary shares in SPMG at a subscription price of 3.5p to David
Sullivan. These options represent 9.99% of the currently issued share capital.
The estimated costs incurred to facilitate the refinancing of the Group are
approximately GBP1.2m, which will be included in the results to be reported for
the six months to 31 Julyt 2009.
The results for the six months to 31 January 2009 include the results of Sport
Newspapers Ltd ("Sport Newspapers") for the full six months (31 January 2008
included the results of Sport Newspapers for just less than five months since
the acquisition) and the results of Flip Media Ltd ("Flip") for the full six
months (31 January 2008 Nil). In the six months to 31 January 2009, Group
revenue fell by 19% to GBP11.7 million (2008 H1: GBP14.4 million). Underlying
operating profit (before amortisation of intangible assets of GBP0.8 million,
share based payment charges of GBP0.9 million, reorganisation and re-launch
costs of GBP0.5 million, depreciation and interest) decreased to GBP0.6 million
(2008 H1: GBP3.3 million). Adjusted EPS, with amortisation of intangibles, share
based payment and reorganisation costs stripped out, was 0.01p (2008 H1:
2.55p). The balance sheet as at 31 January 2009 shows net assets of GBP24.0
million (31 July 2008: GBP24.8 million). Net debt stood at GBP11.4 million at
the period end (31 July 2008: GBP9.9 million). Cash generated from operations in
the period was GBP0.3 million (2008 H1: GBP3.5 million). Net cash outflow after
investments and finance costs was GBP0.4m (2008 H1: GBP0.6m). There is no
interim dividend.
The Newspaper business was profitable, and circulation reasonably steady, until
November 2008. Reflecting a price war in the Red Top tabloids, and the economic
slowdown, circulation and advertising revenues fell substantially thereafter,
resulting in trading losses for the newspaper since November. Although
circulation has stabilised in recent months, advertising remains sluggish, and
while management has been working on cost savings, losses have continued, albeit
at reduced levels. The re-organisation of the business, reflecting a
re-negotiated print contract and a further reduction in staffing levels, is
expected to restore the business to consistent profitability at current
circulation and advertising levels as a result of the substantial and
sustainable costs savings that are being implemented with immediate effect.
David Sullivan, the previous proprietor, will assume the position of Honorary
Publisher, and will be assisting Sport Newspaper Limited in its efforts to
increase circulation and profitability.
The NetCollex business remains profitable, albeit at lower levels reflecting the
lower circulation figures of the newspaper which is the primary marketing tool
of NetCollex.
As previously announced, the Group reporting year end has been changed from July
31st to December 31st. We expect to report on the next six months ending July
31st by way of a further interim report. The prevailing economic uncertainty in
the retail and consumer sectors and continuing pricing strategies by competitor
titles present ongoing risks and uncertainties to the Group in implementing the
re-organization of the business. However, the Board is confident that the
removal of concerns about the financing of the Group and the prospects for
restoration of monthly profitability to the newspaper provide a platform for
progress during the remainder of the year.
Finally, I would like to take this opportunity to thank our staff for their
dedication and understanding and look forward to updating shareholders with
further progress in due course.
David Bailey
Chairman
30 April 2009
Statement of directors' responsibilities
The Directors confirm that this condensed set of financial information has been
prepared in accordance with IAS34 as adopted by the European Union, and that the
Chairman's Statement herein includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8.
The Directors of Sport Media Group Plc are listed in the Sport Media Group Plc
Annual Report for the year ended 31 July 2008.
By order of the Board
CONSOLIDATED INTERIM INCOME STATEMENT
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | 6 months | | 6 months | | Year to |
| | | | to | | to | | 31 July |
| | | | 31 Jan | | 31 Jan | | 2008 |
| | | | 2009 | | 2008 | | Audited |
| | | | Unaudited | | Unaudited | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | Note | | GBP'000s | | GBP'000s | | GBP'000s |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Revenue | 3 | | 11,717 | | 14,364 | | 29,394 |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Cost of sales | | | (6,780) | | (7,144) | | (16,095) |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Gross profit | | | 4,937 | | 7,220 | | 13,299 |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Administrative costs | | | (4,300) | | (3,963) | | (6,865) |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Underlying operating | 3 | | 637 | | 3,257 | | 6,434 |
| profit* | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Depreciation | | | (82) | | (101) | | (225) |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Finance income | | | 2 | | 77 | | 103 |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Finance costs | | | (316) | | (23) | | (309) |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Underlying profit before | | | 241 | | 3,210 | | 6,003 |
| tax ** | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Share based | | | (858) | | (470) | | (1,026) |
| payment charges | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Re-organisation and | | | (508) | | - | | (1,489) |
| re-launch charges | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Negative goodwill on | | | - | | - | | 279 |
| acquisitions | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Amortisation of | | | (765) | | (418) | | (1,316) |
| intangibles | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Impairment of goodwill | | | - | | - | | (20,676) |
| and other intangibles | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| (Loss)/profit before tax | | | (1,890) | | 2,322 | | (18,225) |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Taxation credit/(charge) | | | 235 | | (737) | | 191 |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| (Loss)/profit for the | | | (1,655) | | 1,585 | | (18,034) |
| period from | | | | | | | |
| continuing operations | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Minority interest | | | (53) | | (40) | | (65) |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| (Loss)/profit for the | | | (1,708) | | 1,545 | | (18,099) |
| period | | | | | | | |
| attributable to equity | | | | | | | |
| holders | | | | | | | |
| of the parent | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Earnings per share for | | | | | | | |
| profit attributable to | | | | | | | |
| the equity holders of the | | | | | | | |
| Company during the | | | | | | | |
| period: | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Basic (loss)/earnings per | 4 | | (1.76)p | | 1.81p | | (19.87)p |
| share | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Adjusted (loss)/earnings | 4 | | 0.01p | | 2.55p | | 5.72p |
| per share | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| Diluted (loss)/earnings | 4 | | (1.76)p | | 1.61p | | (19.87)p |
| per share | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
| | | | | | | | |
+---------------------------+-------+-----------+-----------+--+-----------+--+-----------+
* Operating profit before non-recurring items, amortisation and impairment of
intangibles, share based payment charges, interest and taxation.
** Profit before tax and non-recurring items, amortisation and impairment of
intangibles, and share based payment charges.
CONSOLIDATED INTERIM BALANCE SHEET
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | 31 Jan | | 31 July | | 31 Jan |
| | | 2009 | | 2008 | | 2008 |
| | | Unaudited | | Audited | | Unaudited |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | GBP'000s | | GBP'000s | | GBP'000s |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Non-current assets | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Property, plant and equipment | | 218 | | 286 | | 393 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Indefinite lived assets | | 11,452 | | 11,452 | | 31,751 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Customer relationships and | | 2,725 | | 3,102 | | 3,559 |
| contracts | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Goodwill | | 18,194 | | 18,194 | | 24,700 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Other intangible assets | | 4,284 | | 3,390 | | 4,922 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Investments | | 353 | | 3 | | 3 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Deferred tax assets | | 618 | | 430 | | 141 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | 37,844 | | 36,857 | | 65,469 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Current assets | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Inventories | | 152 | | 102 | | 100 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Trade and other receivables | | 5,306 | | 6,812 | | 7,559 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Cash and cash equivalents | | 106 | | 534 | | 1,118 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | 5,564 | | 7,448 | | 8,777 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Total assets | | 43,408 | | 44,305 | | 74,246 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Current liabilities | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Trade and other payables | | 2,970 | | 4,066 | | 3,853 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Short-term borrowings | | 11,473 | | 10,430 | | 8,924 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Current tax payable | | - | | - | | 1,005 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | 14,443 | | 14,496 | | 13,782 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Non-current liabilities | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Deferred tax | | 4,939 | | 4,986 | | 11,307 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | 4,939 | | 4,986 | | 11,307 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Total liabilities | | 19,382 | | 19,482 | | 25,089 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Total net assets | | 24,026 | | 24,823 | | 49,157 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Equity attributable to equity | | | | | | |
| holders of the parent | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Share capital | | 242 | | 242 | | 242 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Share premium account | | 41,537 | | 41,537 | | 44,741 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Other reserves | | 100 | | 100 | | 100 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Share award and option reserve | | 1,952 | | 1,094 | | 538 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Retained earnings | | (19,954) | | (18,246) | | 3,465 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Equity shareholders' funds | | 23,877 | | 24,727 | | 49,086 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Minority interest | | 149 | | 96 | | 71 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
| Total shareholders' funds | | 24,026 | | 24,823 | | 49,157 |
+-----------------------------------+-------+------------+---+------------+--+------------+
| | | | | | | |
+-----------------------------------+-------+------------+---+------------+--+------------+
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | Share | | Share | | Other | | Share | | Retained | | Total |
| | | capital | | premium | | reserves | | option | | earnings | | equity |
| | | | | account | | | | reserve | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| |Note | GBP'000s | | GBP'000s | | GBP'000s | | GBP'000s | | GBP'000s | | GBP'000s |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Balance at 1 August | | 96 | | 1,187 | | 100 | | 68 | | 3,333 | | 4,784 |
| 2007 | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Adjustment to IFRS | | - | | - | | - | | - | | 131 | | 131 |
| transaction estimates | | | | | | | | | | | | |
| (1) | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Profit for the period | | - | | - | | - | | - | | 1,545 | | 1,545 |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Charge for share based | | - | | - | | - | | 470 | | - | | 470 |
| payments | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Dividends | 5 | - | | - | | - | | - | | (1,544) | | (1,544) |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Issue of share capital | | 146 | | 43,554 | | - | | - | | - | | 43,700 |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Balance at 31 January | | 242 | | 44,741 | | 100 | | 538 | | 3,465 | | 49,086 |
| 2008 | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Loss for the period | | - | | - | | - | | - | | (19,775) | | (19,775) |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Charge for share based | | - | | - | | - | | 556 | | - | | 556 |
| payments | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Dividends | 5 | - | | - | | - | | - | | (1,936) | | (1,936) |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Cost of shares issued | | - | | (3,204) | | - | | - | | - | | (3,204) |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Balance at 31 July 2008 | | 242 | | 41,537 | | 100 | | 1,094 | | (18,246) | | 24,727 |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Loss for the period | | - | | - | | - | | - | | (1,708) | | (1,708) |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Charge for share based | | - | | - | | - | | 858 | | - | | 858 |
| payments | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| Balance at 31 January | | 242 | | 41,537 | | 100 | | 1,952 | | (19,954) | | 23,877 |
| 2009 | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
| | | | | | | | | | | | | |
+-------------------------+------+----------+--+----------+--+----------+--+----------+--+----------+--+----------+
Note:
(1) Consolidated earnings at 31 July 2007 were originally reported on an
unaudited basis in the Company's IFRS transition document and interim statement
published in April 2008 as GBP3,464,000. This was adjusted to GBP3,333,000 in
the comparative balance sheet in the audited financial statements for the Group
published in January 2009.
CONSOLIDATED INTERIM CASH FLOW STATEMENTS
+------------------------------------+-----+------------+-+------------+-+------------+
| | | 6 months | | 6 months | | Year to 31 |
| | | to | | to | | July 2008 |
| | | 31 | | 31 Jan | | |
| | | Jan 2009 | | 2008 | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | Unaudited | | Unaudited | | Audited |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | GBP'000s | | GBP'000s | | GBP'000s |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Underlying operating profit | | 637 | | 3,257 | | 6,434 |
+------------------------------------+-----+------------+-+------------+-+------------+
| Adjustments for: | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Decrease/(increase) in | | 1,598 | | 1,594 | | 2,484 |
| trade and other | | | | | | |
| receivables | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| (Increase) in inventories | | (50) | | (60) | | (62) |
+------------------------------------+-----+------------+-+------------+-+------------+
| (Decrease)/increase in | | (1,410) | | (1,202) | | (1,806) |
| trade & other payables | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Profit on disposal of | | - | | (106) | | (106) |
| investments | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash generated from operations | | 775 | | 3,483 | | 6,944 |
| before non-recurring costs | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Re-organisation and re-launch | | (508) | | - | | (1,489) |
| costs | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash generated from operations | | 267 | | 3,483 | | 5,455 |
+------------------------------------+-----+------------+-+------------+-+------------+
| Interest received | | 2 | | 77 | | 103 |
+------------------------------------+-----+------------+-+------------+-+------------+
| Interest paid | | (444) | | (23) | | (309) |
+------------------------------------+-----+------------+-+------------+-+------------+
| Income taxes paid | | - | | (873) | | (1,015) |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Net cash from operating activities | | (175) | | 2,664 | | 4,234 |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Acquisitions of subsidiaries net | | - | | (47,911) | | (47,256) |
| of cash acquired | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Purchase of property, plant and | | (14) | | (70) | | (83) |
| equipment | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Purchase of intangible assets | | (978) | | (1,455) | | (2,063) |
+------------------------------------+-----+------------+-+------------+-+------------+
| Capitalised development | | (304) | | (250) | | (1,304) |
| expenditure | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Sale/(purchase) of investments | | - | | 356 | | 356 |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Net cash used in investing | | (1,296) | | (49,330) | | (50,350) |
| activities | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Proceeds from issue of share | | - | | 43,700 | | 41,100 |
| capital | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Share issue costs settled in cash | | - | | - | | (604) |
+------------------------------------+-----+------------+-+------------+-+------------+
| Proceeds from new borrowings | | 1,043 | | 5,000 | | 8,500 |
+------------------------------------+-----+------------+-+------------+-+------------+
| Repayment of borrowings | | - | | (1,076) | | (570) |
+------------------------------------+-----+------------+-+------------+-+------------+
| Payment of equity dividends | | - | | (1,544) | | (3,480) |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Net cash from financing activities | | 1,043 | | 46,080 | | 44,946 |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Net decrease in cash and cash | | (428) | | (586) | | (1,170) |
| equivalents | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash and cash equivalents at | | 534 | | 1,704 | | 1,704 |
| beginning of | | | | | | |
| period | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| Cash and cash equivalents at end | | 106 | | 1,118 | | 534 |
| of period | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
| | | | | | | |
+------------------------------------+-----+------------+-+------------+-+------------+
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION
1. General Information
Sport Media Group Plc and its subsidiaries ("the Group") sell digital media
content through mobile telephones via the internet to mobile customers of major
UK network operators and users of leading UK internet key search engines. Since
September 2007 the Group has been the publisher of two national newspapers in
the UK under the titles of the Daily Sport and the Sunday Sport.
SPMG, the Group's ultimate parent company, is incorporated and domiciled in
Great Britain. Its registered office is at Ramillies House, 2 Ramillies Street,
London W1F 7LN and its principal places of business are 26 Thames Road, Barking,
Essex IG11 0JA and 19 Great Ancoats Street, Manchester M60 4BT. SPMG's ordinary
shares are listed on the AIM market of the London Stock Exchange.
2. Basis of preparation
The interim financial information has been prepared in accordance with IAS 34
'Interim financial reporting' and on the basis of the accounting policies set
out in the July 2008 annual report and accounts, which are prepared in
accordance with International Financial Reporting Standards. The interim
financial information is unaudited, has not been reviewed by the Group's
auditors and does not constitute statutory accounts as defined in Section 434 of
the Companies Act 2006. The last statutory accounts for the Company and the
Group, for the financial year ended 31 July 2008, upon which the auditors issued
a disclaimer of view opinion, have been delivered to the registrar of companies.
As announced on 7 January 2009, on 6 January 2009 the Group was notified by its
bankers that SPMG was in breach of one of its banking covenants. The bank
initially informed the Board that the Group would be provided with a two month
extension to its current facility, expiring on 6 March 2009. That extension
period was later extended to enable the Group continue to negotiate in relation
to the breach and the Group has subsequently reached agreement with its bankers
for an extension of its current banking facilities for a period of 18 months. In
addition, the Group has reached agreement with David Sullivan and Gold Group
International Limited for the provision of loans of GBP1.68 million. The interim
financial information has therefore been prepared on a going concern basis.
The accounting policies adopted by the Group and set out in its last statutory
accounts have been applied consistently throughout the Group for the purposes of
preparation of this consolidated interim financial information.
In the period between the publication of the Company's unaudited interim results
for the six months ended 31 January 2008 and the audited annual report for the
year ended 31 July 2008 changes were made to certain accounting estimates
underlying the Group's valuation model for acquired intangible assets. These
changes in accounting estimates gave rise to changes in recognised assets,
liabilities and equity on consolidation. In accordance with IAS 8, these changes
were recognised by adjusting the carrying amounts in the period ended 31 July
2008. The impact of the changes between 31 January 2008 and 31 July 2008 was to
reduce indefinite lived assets by GBP20.8 million, to reduce other intangible
assets by GBP0.9 million, to increase goodwill on consolidation (before
impairment charges) by GBP12.2 million, to reduce deferred tax liabilities by
GBP6.9 million and to reduce consolidated equity by GBP2.6 million.
This consolidated interim financial information was been approved for issue by
the Board of Directors on 29 April 2009.
3. Segment analysis
Prior to the acquisition of Sport Newspapers the Group was organised for
management purposes into a single operating division delivering digital content
to mobile telephony and internet based platforms. Following the acquisition of
Sport Newspapers the group is organised into two operating divisions for
management purposes - Digital and Print.
Digital Division - digital content delivery
For internal reporting purposes the group records and monitors digital content
revenues and cost of sales according to the delivery platform to which content
is delivered and through which services are provided, differentiating its key
business segments between mobile telephony and internet. Administrative expenses
of the digital content delivery business are shared overheads of that business
and cannot meaningfully be allocated by revenue stream. The principal tangible
fixed assets utilised in the digital content delivery business consist of
computer equipment and servers, which are utilised in the delivery of content
and services through both platforms. All of the group's digital content delivery
activities are currently carried out in the United Kingdom.
Print Division - publication of newspapers, magazines and related periodicals
For internal reporting purposes the group records and monitors revenues of the
Print Division according to the nature of the revenues - from the wholesale
distribution of newspaper and magazine titles and from advertising,
differentiating its advertising revenues between classified and display. The
Group does not differentiate cost of sales in the Print Division between
wholesale and advertising revenue streams as the overwhelming majority of such
costs represent shared costs of producing, printing and distributing its
newspaper titles. Similarly, administrative expenses of the print business are
shared overheads of that business and cannot meaningfully be allocated by
revenue stream. Excluding goodwill and other intangible assets arising on
consolidation, the principal tangible fixed assets utilised in the print
business consist of computer equipment and fixtures and fittings, which are
utilised in the production of the titles. All of the group's print activities
are currently carried out in the United Kingdom and Republic of Ireland. For
internal reporting purposes management information in relation to publishing
activities in the Republic of Ireland is treated as combined with information on
newspaper and magazine sales in the UK and separate geographical segment
information has not therefore been presented.
Group overheads
Group overheads consist of the costs of retaining the Company's AIM listing,
investor relations activities and some central functions which are not recharged
to the operating divisions.
The segment analysis presented in this interim financial information differs in
presentation from that presented in the Group's 2008 annual report in that the
component elements of the Print Division, in so far as they were previously
separately disclosed, are now aggregated.
The directors do not consider the interim financial information to be subject to
significant seasonal or cyclical fluctuations.
Segment information about these businesses is presented below.
+-------------------------------------+---------------+---------------+---------------+---------------+
| 6m to 31 January 2009 | Digital | Print | Group & | |
| | | | eliminations | Consolidated |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Gross revenues | 2,018 | 9,826 | (127) | 11,717 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Intra-segment sales | - | (127) | 127 | - |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Net revenues | 2,018 | 9,699 | - | 11,717 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Underlying operating profit | 307 | 330 | - | 637 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Depreciation | (18) | (64) | - | (82) |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Impairment and amortisation of | (213) | (552) | - | (765) |
| intangibles | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Share based payment charges | - | - | (858) | (858) |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Re-organisation and re-launch | - | (508) | - | (508) |
| charges | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Profit/(loss) before interest and | 76 | (794) | (858) | (1,576) |
| tax | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Finance costs - net | | | | (314) |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Loss before tax | | | | (1,890) |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | 235 |
| Taxation credit | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Loss for the period | | | | (1,655) |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Balance sheet | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Assets | 6,611 | 43,310 | (7,131) | 42,790 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Liabilities | 1,201 | 2,575 | (806) | 2,970 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Capital expenditure | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Property, plant and equipment | - | 12 | - | 12 |
+-------------------------------------+---------------+---------------+---------------+---------------+
| Goodwill - business combinations | - | - | - | - |
+-------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+-------------------------------------+---------------+---------------+---------------+---------------+
Segment assets and liabilities are reconciled to Group assets and liabilities as
follows:
+-----------------------------------------------+----------+----------+-+-------------+
| | | Assets | | Liabilities |
| | | GBP'000 | | GBP'000 |
+-----------------------------------------------+----------+----------+-+-------------+
| | | | | |
+-----------------------------------------------+----------+----------+-+-------------+
| Segment assets / liabilities | | 42,790 | | 2,970 |
+-----------------------------------------------+----------+----------+-+-------------+
| Borrowings | | - | | 11,473 |
+-----------------------------------------------+----------+----------+-+-------------+
| Deferred tax | | 618 | | 4,939 |
+-----------------------------------------------+----------+----------+-+-------------+
| | | | | |
+-----------------------------------------------+----------+----------+-+-------------+
| | | | | |
+-----------------------------------------------+----------+----------+-+-------------+
| Total | | 43,408 | | 19,382 |
+-----------------------------------------------+----------+----------+-+-------------+
| | | | | |
+-----------------------------------------------+----------+----------+-+-------------+
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| 6m to 31 January 2008 | Digital | | Print | | Group & | | Consolidated |
| | | | | | eliminations | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Gross | 4,628 | | 9,906 | | (170) | | 14,364 |
| revenues | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Intra-segment | - | | (170) | | 170 | | - |
| sales | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Net | 4,628 | | 9,736 | | - | | 14,364 |
| revenues | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Underlying | 2,612 | | 645 | | - | | 3,257 |
| operating | | | | | | | |
| profit | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Depreciation | (31) | | (70) | | - | | (101) |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Impairment | (128) | | (290) | | - | | (418) |
| and | | | | | | | |
| amortisation | | | | | | | |
| of | | | | | | | |
| intangibles | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Share | - | | - | | (470) | | (470) |
| based | | | | | | | |
| payment | | | | | | | |
| charges | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Profit/(loss) | 2,453 | | 285 | | (470) | | 2,268 |
| before | | | | | | | |
| interest and | | | | | | | |
| tax | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Finance | | | | | | | 54 |
| costs - | | | | | | | |
| net | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Loss | | | | | | | 2,322 |
| before | | | | | | | |
| tax | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Taxation | | | | | | | (737) |
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Loss | | | | | | | 1,585 |
| for | | | | | | | |
| the | | | | | | | |
| period | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Balance | | | | | | | |
| sheet | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Assets | 10,813 | | 70,453 | | (7,161) | | 74,105 |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Liabilities | 5,465 | | 3,252 | | (4,864) | | 3,853 |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Capital | | | | | | | |
| expenditure | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Property, | 82 | | 635 | | (635) | | 82 |
| plant and | | | | | | | |
| equipment | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| Goodwill | - | | 36,352 | | - | | 36,352 |
| - | | | | | | | |
| business | | | | | | | |
| combinations | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
| | | | | | | | |
+--------------------------------------------------+------------+--+------------+--+--------------+--+--------------+
Segment assets and liabilities are reconciled to Group assets and liabilities as
follows:
+------------------------------------------------+----------+----------+-+-------------+
| | | Assets | | Liabilities |
| | | GBP'000 | | GBP'000 |
+------------------------------------------------+----------+----------+-+-------------+
| | | | | |
+------------------------------------------------+----------+----------+-+-------------+
| Segment | | 74,105 | | 3,853 |
| assets / | | | | |
| liabilities | | | | |
+------------------------------------------------+----------+----------+-+-------------+
| Borrowings | | - | | 8,924 |
+------------------------------------------------+----------+----------+-+-------------+
| Corporation | | - | | 1,005 |
| tax payable | | | | |
+------------------------------------------------+----------+----------+-+-------------+
| Deferred | | 141 | | 11,307 |
| tax | | | | |
+------------------------------------------------+----------+----------+-+-------------+
| | | | | |
+------------------------------------------------+----------+----------+-+-------------+
| | | | | |
+------------------------------------------------+----------+----------+-+-------------+
| Total | | 74,246 | | 25,089 |
+------------------------------------------------+----------+----------+-+-------------+
| | | | | |
+------------------------------------------------+----------+----------+-+-------------+
4. Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders of the Company divided by the weighted
average number of shares in issue during the year. The calculation of diluted
earnings per share is based on the basic earnings per share, adjusted to allow
for the issue of shares and the post tax effect of dividends and/or interest, on
the assumed conversion of all dilutive options and other dilutive potential
ordinary shares. Dilutive options and other dilutive potential ordinary
shares are not considered dilutive where the effect of doing so would be to
reduce a reported loss per share.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below:
+-----------------------------------------+------------+-+------------+-+------------+
| 6 months to 31 January 2009 | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | Earnings | | Weighted | | Per share |
| | | | Average | | amount |
| | | | number of | | |
| | | | shares | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | GBP'000s | | | | Pence |
+-----------------------------------------+------------+-+------------+-+------------+
| Continuing and total operations | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Loss after tax | (1,708) | | 96,851,547 | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Earnings attributable to ordinary | (1,708) | | | | |
| shareholders | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Weighted average number of shares (used | | | 96,851,547 | | |
| for basic | | | | | |
| earnings per share) | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Dilutive effect of options | | | - | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Dilutive effect of share bonus schemes | | | - | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Diluted weighted average number of | (1,708) | | 96,851,547 | | |
| shares (used for | | | | | |
| diluted earnings per share) | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Basic earnings per share | | | | | (1.76)p |
+-----------------------------------------+------------+-+------------+-+------------+
| | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| Diluted earnings per share | | | | | (1.76)p |
+-----------------------------------------+------------+-+------------+-+------------+
| | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
+-----------------------------------------+------------+------------+------------+
| 6 months to 31 January 2008 | | | |
+-----------------------------------------+------------+------------+------------+
| | Earnings | Weighted | Per share |
| | | Average | amount |
| | | number of | |
| | | shares | |
+-----------------------------------------+------------+------------+------------+
| | GBP'000s | | Pence |
+-----------------------------------------+------------+------------+------------+
| Continuing and total operations | | | |
+-----------------------------------------+------------+------------+------------+
| Profit after tax | 1,545 | 85,451,545 | |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| Earnings attributable to ordinary | 1,545 | | |
| shareholders | | | |
+-----------------------------------------+------------+------------+------------+
| Weighted average number of shares (used | | 85,451,545 | |
| for basic | | | |
| earnings per share) | | | |
+-----------------------------------------+------------+------------+------------+
| Dilutive effect of options | - | 3,754,802 | |
+-----------------------------------------+------------+------------+------------+
| Dilutive effect of share bonus schemes | - | 6,779,604 | |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| Diluted weighted average number of | 1,545 | 95,985,951 | |
| shares (used for | | | |
| diluted earnings per share) | | | |
+-----------------------------------------+------------+------------+------------+
| Basic earnings per share | | | 1.81p |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| Diluted earnings per share | | | 1.61p |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
+-----------------------------------------+------------+------------+------------+
| Year to 31 July 2008 | | | |
+-----------------------------------------+------------+------------+------------+
| | Earnings | Weighted | Per share |
| | | Average | amount |
| | | number of | |
| | | shares | |
+-----------------------------------------+------------+------------+------------+
| | GBP'000s | | Pence |
+-----------------------------------------+------------+------------+------------+
| Continuing and total operations | | | |
+-----------------------------------------+------------+------------+------------+
| Loss after tax | (18,099) | 91,104,234 | |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| Earnings attributable to ordinary | (18,099) | | |
| shareholders | | | |
+-----------------------------------------+------------+------------+------------+
| Weighted average number of shares (used | | 91,104,234 | |
| for basic | | | |
| earnings per share) | | | |
+-----------------------------------------+------------+------------+------------+
| Dilutive effect of options | - | - | |
+-----------------------------------------+------------+------------+------------+
| Dilutive effect of share bonus scheme | - | - | |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| Diluted weighted average number of | (18,099) | 91,104,234 | |
| shares (used for | | | |
| diluted earnings per share) | | | |
+-----------------------------------------+------------+------------+------------+
| Basic earnings per share | | | (19.87)p |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| Diluted earnings per share | | | (19.87)p |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
Adjusted basic and diluted earnings per share
In order to understand the underlying trading performance, the directors
consider it appropriate to disclose earnings per share before and after
amortisation of acquired intangible assets and the costs of share based
payments. The calculation of adjusted earnings per share is set out below:
+-------------------------------------+------------+-------------+------------+
| | 6 months | 6 months to | Year to |
| | to | 31 | 31 July |
| | 31 Jan | Jan | 2008 |
| | 2009 | 2008 | |
+-------------------------------------+------------+-------------+------------+
| | Unaudited | Unaudited | Audited |
+-------------------------------------+------------+-------------+------------+
| (Loss)/earnings attributable to | (1,708) | 1,545 | (18,099) |
| ordinary shareholders | | | |
| (GBP'000s) | | | |
+-------------------------------------+------------+-------------+------------+
| Post-tax impairment and | 551 | 293 | 21,333 |
| amortisation of acquired | | | |
| intangible assets (GBP'000s) | | | |
+-------------------------------------+------------+-------------+------------+
| Post-tax costs of re-organization | 342 | - | 1,072 |
| and re-launch (GBP'000s) | | | |
+-------------------------------------+------------+-------------+------------+
| Post-tax cost of share based | 818 | 329 | 902 |
| payments (GBP'000s) | | | |
+-------------------------------------+------------+-------------+------------+
| | | | |
+-------------------------------------+------------+-------------+------------+
| Adjusted profit on ordinary | 3 | 2,167 | 5,208 |
| activities after | | | |
| taxation (GBP'000s) | | | |
+-------------------------------------+------------+-------------+------------+
| | | | |
+-------------------------------------+------------+-------------+------------+
| Weighted average number of shares | 96,851,547 | 85,451,545 | 91,104,234 |
| in | | | |
| issue - basic | | | |
+-------------------------------------+------------+-------------+------------+
| - diluted | 96,851,547 | 95,985,951 | 91,104,234 |
+-------------------------------------+------------+-------------+------------+
| | | | |
+-------------------------------------+------------+-------------+------------+
| Basic earnings/(loss) per share | (1.76) | 1.81 | (19.87) |
| (pence) | | | |
+-------------------------------------+------------+-------------+------------+
| Amortisation of acquired intangible | 0.57 | 0.34 | 23.42 |
| assets | | | |
| (pence) | | | |
+-------------------------------------+------------+-------------+------------+
| Costs of re-organization and | 0.35 | - | 1.18 |
| re-launch (pence) | | | |
+-------------------------------------+------------+-------------+------------+
| Cost of share based payments | 0.85 | 0.40 | 0.99 |
| (pence) | | | |
+-------------------------------------+------------+-------------+------------+
| | | | |
+-------------------------------------+------------+-------------+------------+
| Adjusted earnings per share (pence) | | | |
+-------------------------------------+------------+-------------+------------+
| - basic | 0.01 | 2.55 | 5.72 |
+-------------------------------------+------------+-------------+------------+
5. Dividends
+-----------------------------------------+------------+-+------------+-+------------+
| | 6 months | | 6 months | | Year to 31 |
| | to | | to | | July 2008 |
| | 31 Jan | | 31 Jan | | |
| | 2009 | | 2008 | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | Unaudited | | Unaudited | | Aaudited |
+-----------------------------------------+------------+-+------------+-+------------+
| | GBP'000s | | GBP'000s | | GBP'000s |
+-----------------------------------------+------------+-+------------+-+------------+
| Dividends paid | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| 2007 final dividend - 4.00 pence per | - | | 1,544 | | 1,544 |
| share | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| 2008 interim dividend - 2.00 pence per | - | | - | | 1,936 |
| share | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
| | - | | 1,544 | | 3,480 |
+-----------------------------------------+------------+-+------------+-+------------+
| | | | | | |
+-----------------------------------------+------------+-+------------+-+------------+
6. Share issues
No new shares were issued during the period to 31 January 2009.
7. Share options and share based payments
Share options held by directors, employees and third parties are as follows:
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
|Outstanding |Granted |Exercised |Outstanding |Exercise | Date of | First | Final |
| 01.08.08 | during | during | 31.01.09 | price | grant | date of | date of |
| | period | period | | | |exercise |exercise |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| | | | | | | | |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| 463,972 | - | - | 463,972 | 73p | 08.05.06 | 08.05.07 | 08.05.10 |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| 1,345,765 | - | - | 1,345,765 | 73p | 08.05.06 | 08.05.06 | 08.05.11 |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| 1,237,699 | - | - | 1,237,699 | 73p | 08.05.06 | 08.05.06 | 08.05.16 |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| 707,366 | - | - | 707,366 | 79.25p | 01.11.06 | 01.11.09 | 01.11.16 |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| | | | | | | | |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
| 3,754,802 | - | - | 3,754,802 | | | | |
+-------------+---------+-----------+-------------+----------+----------+----------+----------+
A modified Black-Scholes model has been used to determine the fair value of the
share options on the date of grant. The fair value is expensed to the profit and
loss account on a straight line basis over the vesting period, which is
determined annually. The model assesses a number of factors in calculating the
fair value. These include the market price on the date of grant, the exercise
price of the share options, the expected share price volatility of the market
sector in which the group operates, the expected life of the options, the risk
free rate of interest and the expected level of dividends in future periods.
The inputs into the model were as follows:
+-----------------------+------------+------------+------------+------------+
| Granted | Unapproved | Other 2006 | Other 2006 | EMI 2007 |
+-----------------------+------------+------------+------------+------------+
| | | | | |
+-----------------------+------------+------------+------------+------------+
| Weighted average | 73.00p | 73.00p | 73.00p | 79.50p |
| share price | | | | |
+-----------------------+------------+------------+------------+------------+
| Weighted average | 73.00p | 73.00p | 73.00p | 79.50p |
| exercise price | | | | |
+-----------------------+------------+------------+------------+------------+
| Expected volatility | 25% | 25% | 25% | 46% |
+-----------------------+------------+------------+------------+------------+
| Expected life | 2 years | 5 years | 10 years | 10 years |
+-----------------------+------------+------------+------------+------------+
| Risk-free rate | 4% | 4% | 4% | 4% |
+-----------------------+------------+------------+------------+------------+
| Expected dividend | 6% | 6% | 6% | 6% |
| yield | | | | |
+-----------------------+------------+------------+------------+------------+
Expected volatility was determined at the date of grant of the earlier options
based on the directors' estimates of volatility of similar quoted stocks. In
respect of later grants the directors estimated the actual volatility at the
date of grant by reference to the company's share price since admission to AIM
to the date of the relevant grant.
The weighted average contractual life of share options at 31 January 2009 was 7
years.
During the year ended 31 July 2008 three directors and one senior employee of
the group were granted rights to acquire new ordinary shares under new schemes
as follows:
+-----------------------------------------------------------------------+
| the Executive Share Bonus Plan ('ESBP') |
+-----------------------------------------------------------------------+
| the Executive Incentive Plan ('EIP') |
+-----------------------------------------------------------------------+
| the Non Executive Share Bonus Plan ('NESBP') |
+-----------------------------------------------------------------------+
| the Non Executive Incentive Plan ('NEIP') |
+-----------------------------------------------------------------------+
The terms of the ESBP, EIP, NESBP and NEIP were set out in the Company's AIM
admission document dated 8 August 2007. At 31 January 2009 the following rights
to acquire shares had been granted under the schemes:
+-----------------------+-----------------+---------------------+
| Scheme | Rights over | Vesting period |
| | shares awarded | |
+-----------------------+-----------------+---------------------+
| ESBP | 1,452,771 | 18 months |
+-----------------------+-----------------+---------------------+
| EIP | 3,631,932 | 36 months |
+-----------------------+-----------------+---------------------+
| NESBP | 484,257 | 18 months |
+-----------------------+-----------------+---------------------+
| NEIP | 1,210,644 | 36 months |
+-----------------------+-----------------+---------------------+
| Total | 6,779,604 | |
+-----------------------+-----------------+---------------------+
Shares awarded under the ESBP and the NESBP were subject to forfeit if the
recipients ceased continuous employment with the group in the eighteen month
period following grant of rights (see below).
Shares awarded under the EIP and the NEIP are subject to continuous employment
with the group and performance conditions which must be satisfied over a three
year period from the date of grant of rights. Performance conditions are based
on a target share price on a sliding scale between GBP1.20 and GBP1.60 with 2.5
per cent vesting for each penny increase in the share price. Subject to
satisfaction of the defined performance criteria and to continuous employment
awards will vest in equal instalments on the first, second and third
anniversaries of the award.
The fair value of the share awards on the date of grant was determined by
reference to the market value of shares at that date and the application of an
appropriate discount factor to take into account the probability of the
performance conditions being met. The fair value is expensed to the profit and
loss account on a straight line basis over the vesting period, which is
determined annually.
The inputs into the model were as follows:
+--------------------+-----------+----------+----------+----------+
| Granted | ESBP | EIP | NESBP | NEIP |
+--------------------+-----------+----------+----------+----------+
| | | | | |
+--------------------+-----------+----------+----------+----------+
| Weighted average | 75.00p | 75.00p | 75.00p | 75.00p |
| share price | | | | |
+--------------------+-----------+----------+----------+----------+
| Weighted average | Nil | Nil | Nil | Nil |
| exercise price | | | | |
+--------------------+-----------+----------+----------+----------+
| Discount rate | 25% | 75% | 25% | 75% |
| applied to | | | | |
| performance | | | | |
| conditions | | | | |
+--------------------+-----------+----------+----------+----------+
| Expected life | 18 months | 3 years | 18 | 3 years |
| | | | months | |
+--------------------+-----------+----------+----------+----------+
The charge for share based payments arising in the period ended 31 January 2009
of GBP858,000 included an additional charge of GBP343,000 to correct the
discount applied to the performance contributions applicable for ESBP and NESBP
because all four beneficiaries from these systems qualified for the full share
awards after the balance sheet date.
These interim results will be available on the Company's website
www.sportmediagroup.co.uk. Further copies can be obtained from the registered
office at Ramillies House, 2 Ramillies Street, London W1F 7LN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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