Embargoed Release: 07:00hrs Monday 30 July 2007
Clipper Ventures Plc
(The `Group' or the `Company' or "Clipper Ventures")
Preliminary Results
For the year ended 30th April 2007
Highlights
* Group profit before and after tax of �925k, an increase of 5% year-on-year
and marginally ahead of market expectations.
* The results include the majority of profit associated with the 2006/7 Velux
5 Oceans Race. Although this has led to an 8.5% reduction in turnover,
margin on the Velux 5 Oceans race is particularly strong and accordingly
the Group has benefited from a 14.7% increase in operating profit.
* Earnings per share were static at 2.8p per share.
* Interest costs have more than doubled year-on-year. This was due to the
high level of borrowing early in the reporting period. However the Company
now has no net debt.
* The Group completed a successful fund raising during the period and now has
adequate financial resources going forward.
* Preparations are nearing completion for the next Clipper Round the World
Yacht Race, due to start from Liverpool in September. The event promises to
be the most successful Clipper race to date.
* Following the reduction in capital, and the consequent elimination of the
deficit on the Profit and Loss account, approved earlier this year the
Board is recommending the Company's maiden dividend payment of 0.25p per
share at the forthcoming AGM and intends to pursue a progressive dividend
policy going forward.
Enquiries, please contact:
William Ward Chief Executive, Clipper Ventures plc 02392 526000
Jeremy Knight Finance Director, Clipper Ventures plc 02392 526000
Chris Roberts Hansard Group 020 7245 1100
David Seal Blue Oar Securities Plc 020 7448 4400
Chief Executive's Review
Clipper Round the World Yacht Race
Our unique sponsorship model, which pits cities from around the world against
each other for the Clipper Cup, continues to grow. Sponsorship income in the
Clipper 07 race is forecast to be approximately �5m (the majority of which is
now contracted):
Sponsorship Income �'000 Clipper 05 Clipper 07
Contracted 3,709 4,422
Additionally the Company has already contracted �1m of sponsorship income for
the Clipper 09 race, and discussions have commenced with a number of other
cities interested in continuing their association with the race. The Board sees
this early recruitment of sponsoring cities as key to the future success of the
event, as it gives a forward visibility of income for the business.
Crew income for the Clipper races continues to grow ahead of inflation. As at
the date of publishing these results:
Crew Income �'000 Clipper 05 Clipper 07
Contracted 4,417 4,895
Additional crew income is expected to arise in the coming months from existing
crew members increasing the number of race legs in which they participate.
One of the key factors in the ability of an event to generate sponsorship
income is the level of media coverage it generates. As such the Company views
the media value of its events as a leading indicator of the potential of the
events to generate sponsorship income. During the year, management has
commissioned an independent agency to measure the media value of its events and
it is intended that this measurement shall continue in future events. Media
coverage of the Clipper 05 race was independently valued by Sports Marketing
Surveys at �27.6m, a value that we anticipate will be significantly exceeded in
the Clipper 07 Race following our recently announced partnership with APP
Broadcast to produce a 10-part television series for international
distribution.
The Clipper 05 website generated 26 million hits. A new state-of-the-art
website has just been launched with input from each of the international city
sponsors, audio clips, video footage and more regular position reports and
competitor blogs. The Clipper 07 website is set to generate a vastly increased
number of visitors, further increasing the media reach of the event.
Since the first race in 1996, the event has been transformed from a low-key
amateur sailing race into a major, and highly profitable, international event
attracting the interest of the world's media and business leaders.
Velux 5 Oceans
The Velux 5 Oceans race is known as the longest and toughest event for any
individual in any sport. And the 2006 edition, with Velux as its title sponsor,
proved no exception. From the drama of Mike Golding's rescue of Alex Thomson in
the Southern Ocean, to the domination of the winner's podium by Bernard Stamm,
and the inspiring completion of the race by our 68-year-old Chairman, Sir Robin
Knox Johnston, the race provided a spectacular event.
The sponsorship contract that the Company signed with Velux linked sponsorship
payments to specific targets of media generation of the race, with the maximum
sponsorship payment being made when the race generated a media value of �60m.
The media value of the race is still being measured by Sports Media Surveys,
but has now passed Euro40m and is forecast to shortly exceed Euro60m - maximum
payment level in the Velux Contract. With this success under our belt, we are
now in very advanced discussions with a number of parties interested in the
sponsorship of the next event in 2010, and hope to be able to make further
announcements shortly. We also anticipate that the media value of the 2006
event will allow us to sign a number of secondary sponsors and "official
suppliers" for the 2010 race - a source of sponsorship income which was missing
from the 2006 race.
Nevertheless, the 2006 Velux 5 Oceans race proved profitable. Divisional
operating profit for the event was �1074k, a significant improvement on the
2002 event which was run with limited investment to break even.
When we purchased the 5 Oceans Race (or Around Alone as it was then known) in
2001 for just $150,000 it was seen as an exhausted event with no direction. It
is now one of the most high profile media events within the sport of round the
world sailing with the proven ability to generate solid revenues.
Clipper Training
Building on our world-class training offered to our race crews for the last
eleven years, 2007 saw the launch of our training division, Clipper Training,
in conjunction with Plymouth University and Falmouth College. This opens a new
line of income, offering training to the general public for a maritime studies
degree, as well as giving our existing Clipper Race crews degree credits as a
result of the training they do with us. Additionally we receive a government
subsidy for each student that undertakes our training further boosting this
revenue stream.
Clipper Hospitality & Events
During the year we launched a new division, Clipper Hospitality & Events,
offering corporate sailing onboard our Dubois 68s when they are not involved in
the Clipper Race. This has proved highly attractive, has returned a small
profit in its first year of operations and we look forward to the continued
growth of this area of the business.
Investor Information
A resolution will be proposed at the forthcoming AGM that the Company be
authorised to re-purchase its own shares. It is the Board's intention to
re-purchase shares where the Company has sufficient working capital to do so
and where the price would make the purchase advantageous to shareholders.
The investor relations area of our web-site is currently being upgraded.
Current financial reports and Director profiles are already available at
www.clipper-ventures.com. Additional investor information as required by AIM
Rule 26 will be added shortly.
The Board is pleased with the progress of the Company and is able to report
profits in line with market expectations. It has therefore decided to propose a
maiden dividend payment of 0.25p per share at the forthcoming AGM. It is
intended that this will be the first dividend payment of a progressive dividend
policy, including an interim dividend in the year to April 08.
The Company has been informed of the following Board shareholdings as at the
date of this announcement:
Name of director Number of Ordinary Shares Percentage of the
held Company's issued share
capital
William Ward 7,589,936 19.39
Robin Knox-Johnson 2,749,941 7.02
Bob Dench 666,667 1.70
Guy Spelman 125,000 0.32
David Stubley 433,333 1.11
The Board is pleased to announce the appointment to the Board of Jeremy Matthew
Knight, aged 44, who on 15 December 2006 became finance director on a temporary
basis, as Finance Director and Company Secretary. Jeremy is also a Director of
Corellen Ltd, Clipper Ventures plc, Clipper Ventures Online Ltd, Zapcat Racing
Ltd and Grand Prix of Ocean Racing Ltd. Save for the above there is no further
information required to be disclosed under paragraph (g) of Schedule 2 of the
AIM Rules with respect to the appointment of Jeremy Knight.
Consolidated Profit and Loss Account
For the year ended 30th April 2007
Profit and Loss 2007 2006
� �
Turnover 6,980,615 7,625,197
Cost of Sales (3,127,378) (4,850,919)
Gross Profit 3,853,237 2,774,278
Administration Expenses (2,778,934) (1,838,837)
Operating Profit 1,074,303 935,441
Other Interest Receivable and 13 488
similar income
Interest Payable and similar (148,991) (57,084)
charges
Profit on Ordinary Activities 925,325 878,845
Before Taxation
Tax on profit on Ordinary -
Activities
Profit on Ordinary Activities After 925,325 878,845
Taxation
Profit Per Ordinary Share (Pence) 2.8 2.8
Diluted Profit Per Ordinary Share 2.8 2.8
(Pence)
All results are derived from continuing operations.
There were no recognised gains or losses or other movements in shareholders'
funds other than those included in the profit and loss account above.
Consolidated Balance Sheet
As at 30th April 2007
2007 2007 2006 2006
� � � �
Fixed Assets
Intangible Assets 316,004 321,478
Tangible Assets 4,363,568 4,461,174
Investments 125 125
4,679,697 4,782,777
Current Assets
Assets Held for Resale 214,676 644,044
Stock 147,114 124,057
Debtors 5,114,671 4,101,876
Cash at Bank and In Hand 319,120 1,159
5,795,581 4,871,136
Creditors : amounts (1,470,320) (2,376,431)
falling due
within one year
Deferred Income falling (3,868,185) (3,328,682)
due
within one year
5,338,505 (5,705,113)
Net Current Assets / 457,076 (833,977)
(Liabilities)
Total Assets less Current 5,136,773 3,948,800
Liabilities
Creditors: Amounts falling (200,000) (750,000)
due
after more than one year
Deferred Income falling (1,269,348) (1,669,000)
due
after more than one year (1,469,348) (2,419,000)
Provisions for Liabilities (1,783) (1,783)
3,665,642 1,528,017
Capital and Reserves
Called up share capital 587,195 503,862
Share Premium Account 2,142,728 4,365,951
Profit and Loss Account 935,719 (3,341,796)
Shareholders Funds 3,664,642 1,528,017
Consolidated Cash Flow Statement
For the year ended 30th April 2007
2007 2006
� �
Net cash inflow from operating 438,126 931,491
activities
Returns on investment and servicing
of finance
Interest Received 13 488
Interest Paid (148,991) (57,084)
Net cash inflow / (outflow) for (148,978) (56,596)
returns on
investment and servicing of finance
Taxation 0 1,783
Capital expenditure and financial
investment
Payment to acquire tangible assets (21,426) (1,756,860)
Receipts from sales of tangible assets 0 350
Net cash outflow for capital (21,426) (1,756,510)
expenditure
Net cash outflow before financing 267,722 (879,832)
Financing
Issue of ordinary share capital 70,000 45,654
Share Premium on issue of equity share 942,300 800,595
capital
Repayment of debenture loans (350,000) (500,000)
New loans 0 750,000
Net cash inflow / (outflow) from 662,300 1,096,249
financing
Increase / (decrease) in cash in the 930,022 216,417
year
Reconciliation of Operating Profit to net cash inflow from
operating activities
2007 2006
� �
Operating Profit 1,074,303 935,441
Non Cash consideration on equity issue 200,000 -
Depreciation of tangible assets 333,708 331,011
Amortisation of intangible assets 5,474 91,047
Decrease in assets held for re-sale 214,692 155,956
Decrease / (increase) in stocks (23,057) 49,197
Decrease / (increase) in debtors (1,012,795) 283,527
(Decrease) / increase in creditors (154,199) (914,688)
Net cashflow from operating activities 438,126 931,491
Notes to the Financial Statements.
1) Status of Financial Information
The financial information set out in this announcement does not comprise the
Group's statutory accounts for the years ended 30 April 2007 or 30 April 2006.
The financial information for the year ended 30 April 2006 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was
unqualified with an emphasis of matter paragraph relating to going concern and
did not contain a statement under either Section 237 (2) or Section 237 (3) of
the Companies Act 1985.
The statutory accounts for the year ended 30 April 2007 will be finalised on
the basis of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
2) Earnings per Ordinary Share
Profit/(loss) per share has been calculated on the net basis on the profit on
ordinary activities after taxation of �925,325 (2006: �878,845) using the
weighted average number of ordinary shares in issue of 32,917,942 (2006:
30,859,609).
3) Analysis of Net Debt
1 May Cash Non-Cash 1 May
2006 Flow Changes 2007
Net Cash 1,159 317,961 319,120
Bank Overdrafts (630,233) 612,061 (18,172)
(629,074) 930,022 300,948
Debts Falling Due After One (750,000) 350,000 200,000 (200,000)
Year
(1,379,074) 1,280,022 200,000 100,948
4) Reconciliation of Net Cash Flow to Movement in Net Funds
2007 2006
Increase in cash in the year 930,022 216,417
Net cash from new loans 0 (750,000)
Repayment of debenture loans 550,000 500,000
Movement in debt in year 1,480,022 (33,583)
Opening debt (1,379,074) (1,345,491)
Closing (Debt) / Cash 100,948 (1,379,074)
END
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