Clipper Ventures Plc
Interim Results for the six months to 30 October 2005
Breakthrough into sustainable profitability
Clipper Ventures Plc (`Clipper' or the `Company'), the AIM quoted events
management company which owns and organises the Clipper Round The World Yacht
Race, the 5-Oceans Solo Grand Prix and the Zapcats racing series, announces
interim results for the six months to 30 October 2005. Clipper derives revenues
from sponsorship from the corporate and public sectors, from event participants
and from equipment sales.
KEY POINTS
* Turnaround to profitability
*
+ Pre-tax profit for the six months �570k (12 months 2004: loss (�1.07m))
+ EPS for the six months 2.17p
* Turnover for the six months �3.5m (H1 2004: �580k)
* Profitability anticipated to be sustainable
* Dividend forecast
Sir Robin Knox-Johnston, Chairman, commented:
"Today's results demonstrate that our revenues, based on contracted income,
provide forward visibility as to sustainable profitability with an appropriate
income recognition policy eliminating accounting volatility.
"We have seen a step change in levels of sponsorship interest for both of our
main events which we believe will accelerate further in the years ahead, as
race coverage in the media grows.
"We plan to capitalise on other revenue generating activities, to ensure that
the Clipper fleet is utilised throughout the years in which the round the world
race isn't running. To this end, we are formulating plans with our strategic
partner, Global Sportnet and expect to announce of the creation of a further
yacht racing event shortly."
28 November 2005
Enquiries:
Clipper Ventures Plc +44 (0) 23 8023 7088
William Ward, Chief Executive Officer
Hansard Communications +44 (0) 20 7245 1100
Adam Reynolds/Nicholas Nelson
CHAIRMANS STATEMENT
A period of intense activity saw the start of the fifth Clipper Round The World
Yacht Race from Liverpool in September 2005. This provided a further boost to
the recognition of the Company as a world leader in marine based events. The
results for the period ended 30 October 2005 show the company moving into
profitability. The nature of our income streams demonstrates that such
profitability is sustainable and, I believe, heralds the start of Clipper's
emergence into an era of long term revenue and profits growth.
Financial Summary
In common with past reporting periods, Clipper has maintained an accounting
policy which recognises revenues and costs over an extended period. This
removes the inherent earnings volatility associated with running events every
two years, in the case of the Clipper Round The World Yacht Race and every four
years, in the case of the 5 Oceans Solo Grand Prix.
The �3.5 million revenue for the six month period ended 30 October 2005
represents just 16% of the total amount which will be recognised in subsequent
periods between now and 2008. The Company currently has in excess of �12
million of contracted revenues. Profit before tax for the six month period
ended 30 October 2005 was �569,893.
The fleet of 8 Clipper 60's (used in past Clipper races and replaced for the
current race with a fleet of 10 new racing yachts) still owned by the company,
are shown in the balance sheet as assets held for resale at a total valuation
of �800,000. The board is confident of achieving a higher sale value for these
yachts and is in discussion with potential buyers.
Business Overview
Clipper Ventures Plc is a marine sports company with its main activity being
ocean yacht racing. It operates through three business divisions.
Clipper Round the World Yacht Race
The Company's core business centres on the 35,000 mile Clipper around the world
Yacht Race whereby all ten 68 foot yachts are owned by the Company and
sponsored by cities around the world.
As outlined in the above financial summary, the division operates on the
principal of upfront contracted revenues sourced from corporate and public
sector sponsors and event participants. The Company achieved Income for the
current race of �8.5 million and sponsorship negotiations for the next race in
2007 are well underway and are expected to result in yet higher sponsorship
interest as this race achieves greater international recognition.
As a significant boost to future revenue we are seeking a title Sponsor for the
race and are in discussions with major institutions.
5-Oceans Solo Grand Prix
The Company's second main event is the 5-Oceans solo grand prix, a single
handed around the world race. The rights to this well-known quadrennial event
were acquired by Clipper towards the end of 2001 for US$150,000. Clipper is
using strategic partners such a Globalsportsnet, a subsidiary of the WPP Group
to assist with sponsor searches and media coverage for the next race in October
2006. Clipper provides the race management and promotion and the boats, usually
sponsored, are privately owned.
A major result for the company was the agreement with Velux which, as the
future title sponsor, has contracted to pay Clipper a significant sponsorship
sum.
Bilbao and Fremantle have already signed contracts to host the port stops.
Zapcat power boat racing
The third business, which at present provides a low level of contribution to
Company turnover, is Zapcat racing. Clipper is European agent for the
inflatable catamarans and organises a series of events around the coast
culminating in a national championship. Income is generated through boat sales
and host fees.
Outlook
Today's results demonstrate that our revenues, based on contracted income,
provide forward visibility as to sustainable profitability with an appropriate
income recognition policy eliminating accounting volatility.
We have seen a step change in levels of sponsorship interest for both of our
main events which we believe will accelerate further in the years ahead, as
race coverage in the media grows.
We plan to capitalise on other revenue generating activities, to ensure that
the Clipper fleet is utilised throughout the years in which the round the world
race isn't running. To this end, we are formulating plans with our strategic
partner, Globalsportnet and expect to announce of the creation of a further
yacht racing event shortly.
Dividend
Finally our breakthrough to long term sustainable and growing profitability
means that it is now appropriate to reward our loyal shareholders by the
payment of dividends. The deficit on our profit and loss account precludes the
payment of dividends until it is eliminated and accordingly the Board will
propose resolutions at an Extraordinary General Meeting to be held in 2006 to
pass a resolution enabling the Company to apply to the Court for the
elimination of the deficit, paving the way for the payment of dividends.
The Board envisages that such application should be complete by the time of the
Annual General Meeting to be held to consider the results for the year ending
30 April 2006 and intend, subject to no unforeseen circumstances, to recommend
the payment of a dividend for the year ending 30 April 2006 of at least 0.5p
per share and to adopt a progressive dividend policy thereafter
Sir Robin Knox-Johnston
Chairman
Clipper Ventures Plc
Interim Results for the six months to 30 September 2005
Consolidated Profit and Loss Account
6 Months to Year to
30 October 2005 30 April
2005
�
�
Turnover 3,472,819 581,596
Cost of Sales 1,449,373 (149,868)
Gross Profit 2,023,446 431,728
Administrative Expenses 1,381,727 (572,154)
Stock Provision - (750,655)
Operating Profit / (Loss) 641,719 (891,081)
Profit on Sale of Fixed Asset Investment - -
Other Interest Receivable - -
Interest Payable (71,826) (176,365)
Profit / (Loss) on Ordinary Activities Before 569,893 (1,067,446)
Taxation
Taxation - -
Profit / (Loss) on Ordinary Activities After 569,893 (1,067,446)
Taxation
Clipper Ventures Plc
Interim Results for the six months to 30 September 2005
Consolidated Balance Sheet
As at 30th October 2005 As at 30th April 2005
� � � �
Fixed Assets
Intangible Assets 401,858 412,525
Tangible Assets 4,410,258 3,035,675
Investments 125 125
4,812,241 3,448,325
Current Assets
Assets Held for Resale 800,000 800,000
Stock 156,761 173,254
Debtors 2,980,118 4,385,403
Cash at Bank 248 85,591
3,937,127 5,444,248
Creditors : Amounts Falling (2,243,331) (1,867,008)
Due Within 1 Year
Deferred Income (3,196,016) (4,362,852)
(5,439,346) (6,229,860)
Net Current Assets / (1,502,219) (785,612)
(Liabilities)
Total Assets Less Current 3,310,022 2,662,713
Liabilities
Creditors : Amounts Falling (584,675) (500,000)
Due After More Than 1 Year
Deferred Income (2,352,531) (2,359,790)
(2,937,206) (2,859,790)
372,816 (197,077)
Capital and Reserves
Called Up Share Capital 458,208 458,208
Share Premium Account 3,565,356 3,565,356
Profit and Loss Account (3,650,748) (4,220,641)
Shareholders Funds 372,816 (197,077)
Clipper Ventures Plc
Interim Results for the six months to 30 September 2005
Consolidated Cash Flow Statement
6 Months to 30th Year to 30th April
October
2005
2005
� � � �
Net Cash Inflow from 1,799,235 1,977,572
Operating Activities
Returns on Investments and
Servicing of Finance
Interest Paid (71,826) (176,365)
Interest Element of Finance - -
Lease Rentals
Net Cash Inflow / (Outflow) (71,826) (176,365)
for Returns on Investments
and Servicing of Finance
Capital Expenditure and
Financial Investment
Payment to acquire Tangible (1,581,670) (2,759,578)
Assets
Purchase of Investments - (125)
Purchase of Subsidiary - (28,123)
Undertakings (net of cash
required)
Net Cash Inflow / (Outflow) (1,581,670) (2,787,826)
for Capital Expenditure
Net Cash Inflow / (Outflow) 145,739 (986,619)
Before Financing
Financing
Repayment of Debenture Loans - (1,500,000)
Net Cash Inflow / (Outflow) - (1,500,000)
from Financing
(Decrease) / Increase in 145,739 (2,486,619)
Cash in the Period
END
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