RNS Number:7190Z
Sportsworld Media Group PLC
1 March 2001
1 March 2001
SPORTSWORLD MEDIA GROUP PLC
PROFIT GROWTH REFLECTS ORGANIC GROWTH
AND SUCCESSFUL INTEGRATION OF ACQUISITIONS
Interim results for the six month period ended 31 December 2000
Sportsworld Media Group plc, the sports and lifestyle TV production,
sponsorship and event marketing company, announced today its interim results
for the six month period ended 31 December 2000.
* Turnover up 324% to #16.8m (six months to 31 December 1999: #3.96m) and
operating profits before goodwill amortisation increased to #4.84m (six
months to 31 December 1999: loss of #0.09m), reflecting a combination of
strong organic growth and successful integration of acquisitions
* Pre-tax profits before amortisation of goodwill and exceptional items
rose strongly to #5.01m (six months to 31 December 1999: #0.08m)
* Exceptional profit on disposal of Australia-based outdoor assets of #
3.5m, producing pre-tax profits before amortisation of #8.5m
* Earnings per share excluding goodwill and exceptional profit increased
to 6.2p (six months to 31 December 1999: 0.2p)
* Net cash of #27.3m for both corporate development and suitable
acquisitions
* Channel diversification, reallocation of global advertising budgets,
industry consolidation and the increasing value of lifestyle TV provide
opportunities for substantial growth
* X-treme Video, Infinite Management Solutions and Paterson Associates
acquisitions - all fully integrated
* Strong start to second half, in line with expectations
Commenting on the results, Sportsworld's Chief Executive Geoff Brown said:
"These results reflect a combination of strong organic growth and the
successful integration of good quality acquisitions. We are benefiting from a
market which continues to provide opportunities for substantial growth. On the
one hand, there is a growing demand for extreme sport and youth lifestyle
content from broadcasters, and on the other global advertisers are
reallocating substantial budgets away from traditional television advertising
to programme and sports sponsorship, as their target audiences continue to
fragment.
"The Global Management Team, which was formed last year, has vast
international experience in television, brands, intellectual property, media
sponsorship and new technology. This experience is driving the rapid
integration and development of the businesses that Sportsworld has acquired
over the past two years.
"First half momentum is continuing into the second. Third quarter business has
continued to grow strongly, and we expect trading to continue in line with
expectations. New opportunities continue to present themselves, and we have a
number of exciting projects under development. Acquisitions will continue to
play a part as the Group builds upon its current television content, sports
marketing and youth lifestyle interests."
Notes to Editors:
Photographs for the media are available at newscast online -
www.newscast.co.uk - Tel: 020 7608 1000.
Enquiries:
Geoff Brown, Chief Executive
Andy Fletcher, Chief Financial Officer
Sportsworld Media Group plc Tel: 020 7240 9626
Tim Spratt / Tania Wild
Financial Dynamics Tel: 020 7831 3113
CHAIRMAN'S STATEMENT
Results for the six month period ended 31 December 2000
FINANCIAL SUMMARY
Sportsworld's strong performance and results for the six months ended 31
December 2000 reflect continuing strong organic growth and the Group's ability
to rapidly integrate acquisitions. The Board maintains its aim of building an
international sports and lifestyle related marketing, event management and
television production and distribution company through earnings enhancing
acquisitions. This has resulted in turnover growth of 324% compared to the
corresponding period last year. Pre-tax profits, before goodwill amortisation
and exceptional items, also rose significantly to #5.01m (six months to 31
December 1999: loss of #0.08m). The disposal of the Australian-based
advertising operations, which was part of the SOMI acquisition last year,
produced an exceptional profit of #3.5m.
At the operating level, profits rose from a loss of #0.09m to a profit of #
4.84m. While acquisitions contributed to #2.79m of operating profit before
goodwill amortisation, original businesses contributed #2.22m (six months to
31 December 1999: #0.08m), reflecting the excellent opportunities in
Sportsworld's markets.
Earnings per share, excluding goodwill and exceptional profits rose
substantially to 6.2p (six months to 31 December 1999: 0.2p). In line with the
Group's current development policy, there will be no dividend.
The Group had net cash balances of #27.3m as at 31 December.
MARKET DYNAMICS
The market environment in which the Group operates continues to provide
opportunities for substantial growth, reflecting:
* Channel proliferation and diversification, which is increasing content
demand from broadcasters.
* Growing interest in extreme sport and lifestyle programming from
terrestrial, satellite, cable and new channels.
* Advertisers reallocating substantial budgets from traditional 30 second
advertising to programme content. This reflects the continuous
fragmentation of the advertisers' target market - due to increasing
multi-channel environment and new technology - and the difficulty in
targeting the under 35 demographic, which is increasingly sceptical of TV
advertising.
* The size of the sports and youth lifestyle, content, programme and
sponsorship market, now worth in excess of $30 billion and the fastest
growing segment of the communications industry. It is undergoing rapid
consolidation to meet the global demands of television networks and
international advertisers.
GROUP DEVELOPMENT
Sportsworld has established itself as a preferred acquirer in this large
consolidating market, and consequently has attracted world-class talent.
Importantly, the formation of the nine member Global Management Team last year
has driven the rapid integration of the acquired businesses and further
expanded the Group's expertise in television, event management, sponsorship,
sports stadia advertising and new media.
Sportsworld's acquisition criteria continues to be focused on sports-related
companies, with proven management. During the period, the Group purchased
three businesses bringing the total number of acquisitions in the past two
years to 11.
* X-treme Video
In October, Sportsworld acquired a 51% share of X-treme Video, Europe's
leading extreme sports programme content supplier and video distributor,
based in France. X-treme has an impressive archive of more than 400 hours
of quality programming and supports Sportsworld's position as one of the
world's largest freesports content producers with a library in excess of
8,000 hours.
* Infinite Management Solutions (IMS)
In November, the Group acquired Melbourne based IMS, one of the world's
leading freesport athlete representation firms.
The business manages over 20 leading freesports athletes, including world
champion snowboarders, skate boarders and BMX riders, and provides
athletes for sponsorship opportunities and events.
The acquisition of X-treme and IMS, together with Sportsworld's existing
capabilities, provide cross-selling opportunities for a range of
freesports-related programming and marketing initiatives, as well as
providing freesports athletes for the events organised in the Sportsworld
managed stadia.
* Paterson Associates
In November, the Company acquired Sydney based Paterson Associates, which
manages a number of events and properties on behalf of major sponsorship
clients such as American Express.
In addition to the three acquisitions, in December the Group successfully
disposed of its Australia-based outdoor advertising operations of subsidiary
SOMI to Eye Corp Australia Pty Limited for #29.4m. The disposal reflects
Sportsworld's focus and concentration on the growth of its core activities.
OPERATIONS UPDATE
1. Television Programming and Distribution
Television sales during the period represented approximately 50% of the
Group's revenue and new contract wins, increased contract value and new
programmes led to a doubling in sales.
As part of the exclusive worldwide media and marketing rights of the
Association of Surf Professionals, the Group has successfully pre-sold surfing
programming and has secured major deals in the principal surfing territories
of Brazil, Japan and South Africa.
Currently in production by Sportsworld are the first two episodes of Inside
Line, a joint co-production with Inside Line Media, which is the first ever
officially sanctioned Formula 1 behind-the-scenes programme. The first episode
will focus on the launch of the new Grand Prix season at the Melbourne Grand
Prix.
The Group is the 50% rights holder in the entertainment programme Popstars
worldwide, and therefore receives a net financial return from each market.
Popstars has already been launched by the joint venture in Australia, US and
UK. In the UK, as in Australia, Popstars has become the No 1 rated programme,
attracting audiences in excess of 11 million, which included over 67% of 16-24
year olds. The programme has also recently been launched with substantial
rating success in Canada, where Sportsworld is the producer and owns the
programme outright. The successful format of Popstars is now in production in
a total of 13 countries.
Following the success of Popstars, the Group has several projects and formats
in development, which will further extend its involvement in reality and
lifestyle television, targeting the under 35 year old demographic. The first
of these projects, in association with the Ford Model Agency, is Search for a
Supermodel, following the trials and tribulations of aspiring models. The
programme was announced to the broadcast industry in February following its
launch in Australia last year, where it had similar success to Popstars. The
programme will be promoted at the upcoming MIP markets in April, and the Group
aims to have local versions of Search for a Supermodel on air this Autumn,
when the search is being conducted in 37 countries.
2. Events Marketing and Sponsorship
Sports marketing and sponsorship during the period represented 20% of the
Group's revenue and has continued to grow strongly, in line with expectations.
In the first half, Sportsworld secured a number of sponsorship deals.
* In October, the Group was appointed by the Scottish Rugby Union (SRU)
for three years to act as sponsorship and event management consultants.
* In November, Sportsworld acquired the exclusive marketing and media
rights for the Association of Surf Professionals (ASP) for a five-year
period.
The Group now stages over 100 events per year and is the leading event manager
of freesports based on its involvement with windsurfing, surfing, triathlon,
mountain biking, inline skating and snowboarding.
There continues to be a strong movement by major advertisers to have their
brands participate in and sponsor programming. In addition, Sportsworld has
seen an increasing involvement by advertisers in event marketing, including
Volkswagen, Pepsi, Motorola, Colgate Palmolive and O'Neill.
The successful sponsorship model of sporting events is now being applied to
the new lifestyle programmes, including Search for a Supermodel. Discussions
are taking place with global advertisers for the international roll out of
this programme, including naming rights, sponsorship integration rights and
broadcast sponsorship rights, which will provide additional revenue for the
Group.
3. Stadia
Sports stadia media activities during the period represented approximately 30%
of the Group's revenue.
The sports stadia media market is growing strongly as a result of high demand
for the targeted audiences that it provides, the increased usage of stadia and
the broader television coverage of events.
Sportsworld is one of the largest managers of sports stadia media, providing
perimeter advertising in more than 40 stadia, including all of the Test
Cricket grounds, several Premier League clubs, Sydney's Olympic Stadium and
the Melbourne Cricket Ground.
In addition, the production of television content for high definition screens
within stadia is providing new revenue streams. In December, the Group
launched a content company, Big Screen Productions, to exploit this
opportunity and is investing in new technology to enhance the revenues of each
stadium.
CURRENT TRADING AND OUTLOOK
First half momentum is continuing into the second, with all divisions
performing well. Third quarter business has continued to grow strongly, and
with significant new programmes to be introduced in the second half,
Sportsworld expects trading to continue in line with expectations.
The acquisitive rights investments made by the Group are a robust platform for
Sportsworld's growth, and provide a strong position from which to benefit from
good market conditions.
New opportunities continue to present themselves. In January, the Group
acquired the major property of the international production and distribution
rights for The Pepsi Chart show. Sportsworld will produce local versions of
The Pepsi Chart show in 23 countries. The Group also announced in January that
it had successfully negotiated the #11 million sale of the title sponsorship
rights for Test Match Cricket in the UK, on behalf of the England and Wales
Cricket Board (ECB) to npower. Sportsworld will receive an annual payment over
a minimum of three years for brokering the deal.
In addition, the Group was appointed by Leeds United, in February, to
negotiate future sponsorship deals for their shirts. The football club has
also appointed Sportsworld to negotiate its stadia naming rights.
In freesports, the Group announced this week a major sponsorship deal with
Telenor, the Norwegian state telecommunications company, to develop and
distribute programming from the Arctic Challenge, the world's most prestigious
snowboarding event.
The Group continues to strengthen its portfolio of magazine shows and will be
launching new programmes at MIP in April.
Acquisitions, supported by the Group's strong balance sheet, will continue to
play an important part in Sportsworld's future strategy, as the Group builds
upon its current geographic coverage, television content and sports marketing
and lifestyle interests. A number of potential purchases have been identified
and are being evaluated. The key criteria of Sportsworld's acquisitions are
that they should: support current organic growth; provide and strengthen the
Group's relationships with television broadcasters and global advertisers; and
that they are earnings enhancing.
Sportsworld will continue to focus on its core business of television
production and sales and build stronger and wider relationships with
broadcasters to develop its portfolio of TV, sport and lifestyle interests.
The Company will also capitalise on the strong sponsorship opportunities in
sports and youth lifestyle entertainment programmes. The Board is confident of
a successful outcome for the full year and the growing value of its
intellectual property.
Sportsworld Media Group plc
Unaudited consolidated profit and loss account
for the six months ended 31 December 2000
December 2000
Continuing
Operations Acquisitions Disposals Total
6 months to 6 months to 6 months to 6 months to
31 December 31 December 31 December 31 December
2000 2000 2000 2000
#'000 #'000 #'000 #'000
Turnover 13,950 393 2,443 16,786
Cost of sales (2,898) (76) - (2,974)
11,052 317 2,443 13,812
Operating Expenses
Amortisation of goodwill (2,485) - - (2,485)
Other operating expenses (7,452) (272) (1,451) (9,175)
Operating profit/(loss) 1,115 45 992 2,152
Exceptional items
Profit on business disposals 3,505
Profit on sale of fixed asset
investment -
Profit on ordinary activities
before interest 5,657
Net interest receivable/ 170
(payable)
Profit on ordinary activities
before taxation 5,827
Taxation (766)
Equity minority interest 203
Retained profit for the 5,264
period
Earnings per share
Standard 7.7p
Before amortisation of goodwill & exceptional items 6.2p
Before amortisation of goodwill 11.4p
Diluted earnings per share
Standard 7.4p
Before amortisation of goodwill & exceptional items 6.0p
Before amortisation of goodwill 10.9p
Sportsworld Media Group plc
Unaudited consolidated profit and loss account
for the six months ended 31 December 2000
June 2000
December 1999
Continuing
Operations Acquisitions Total
6 months to year to year to year
to
31 December 30 June 30 June 30June
1999 2000 2000 2000
#'000 #'000 #'000 #'000
Turnover 3,961 10,517 10,252 20,769
Cost of sales (1,695) (4,744) (5,111) (9,855)
2,266 5,773 5,141 10,914
Operating Expenses
Amortisation of goodwill (517) (2,131) (350) (2,481)
Other operating expenses (2,347) (3,723) (3,604) (7,327)
Operating profit/(loss) (598) (81) 1,187 1,106
Exceptional items
Profit on business disposals - -
Profit on sale of fixed asset
investment 1,073 1,073
Profit on ordinary activities
before interest 475 2,179
Net interest (6) 534
receivable/(payable)
Profit on ordinary activities
before taxation 469 2,713
Taxation - (301)
Equity minority interest 166 397
Retained profit for the
period 635 2,809
Earnings per share
Standard 1.7p 5.7p
Before amortisation of goodwill
& exceptional items 0.2p 8.6p
Before amortisation of goodwill 3.0p 10.8p
Diluted earnings per share
Standard 1.6p 5.4p
Before amortisation of goodwill
& exceptional items 0.2p 8.1p
Before amortisation of goodwill 2.9p 10.2p
Sportsworld Media Group plc
Unaudited consolidated balance sheet
at 31 December 2000
December 2000 December 1999 June 2000
#'000 #'000 #'000 #'000 #'000 #'000
Fixed assets
Intangible assets 124,327 44,733 123,032
Tangible assets 8,904 4,879 7,373
Investments 871 283 446
134,102 49,895 130,851
Current assets
Stocks 365 212 285
Debtors 26,793 8,472 24,475
Cash at bank and in hand 62,522 21,046 58,478
89,680 29,730 83,238
Creditors: amounts falling due
within one year
Bank overdraft - - (1,673)
Other (59,828) (6,440) (57,131)
Net current assets/(liabilities)
29,852 23,290 24,434
Total assets less current
liabilities 163,954 73,185 155,285
Creditors: amounts falling due (6,839) (1,567) (4,975)
after more than one year
Provisions for liabilities and
charges (532) (893) (752)
156,583 70,725 149,558
Capital and reserves
Called up share capital 682 542 679
Share premium 76,540 36,735 74,962
Merger reserve 70,172 31,123 70,172
Special reserve 470 470 470
Profit and loss account 8,909 2,237 3,288
Shareholders funds 156,773 71,107 149,571
Minority Interest (190) (382) (13)
Attributable to Equity
156,583 70,725 149,558
Shareholders
Notes
1. Earnings per share
Earnings per share are calculated on profits of #5,264,000 (December 1999:
profits of #635,000) using the weighted average number of ordinary shares in
issue in the period of 68,065,560.
2. Statutory
The interim financial statements have been prepared on a basis consistent with
the accounting policies disclosed in the Annual Report for the period ended 30
June 2000.
The financial information set out above is unaudited and does not form
statutory accounts for the purpose of section 240 of the Companies Act 1985.
The figures for the period ended 30 June 2000 have been extracted from the
Group's accounts for that period which have been filed with the Registrar of
Companies and which contain an unqualified audit report, and which do not
contain any statement under section 237(2) or (3) of the Companies Act 1985.
Sportsworld Media Group plc
Unaudited consolidated cashflow statement
for the six months ended 31 December 2000
6 months to
Year ended
6 months to 31 December
2000 30 June 2000
31 December
2000
#'000 #'000 #'000 #'000 #'000
Net cash outflow from operating
activities 947 (1,611) 1,845
Returns on investment and
servicing of finance
Interest received 602 - 472
Interest paid (34) (17) (326)
Finance lease interest paid (29) (8) (37)
Dividend received from other
- -
investments 539 (25) 109
Taxation (662) (751)
Capital expenditure and financial
investment
Purchase of tangible fixed assets
(3,693) (1,697) (4,207)
Purchase of intangible fixed (413) (845)
assets
Sale of tangible fixed assets - - 5
(4,106) (1,697) (5,047)
Acquisitions and disposals
Sale of businesses and subsidiary
undertakings 22,461 - -
Purchase of subsidiary
undertakings (13,085) (10,478) (19,263)
Net cash on purchase of subsidiary
undertakings 126 485 736
Sale of fixed asset investments - 1,312 1,438
Purchase of fixed asset (450) - (262)
investments 9,052 (8,681) (17,351)
Cash (outflow)/inflow before 5,770 (12,014) (21,195)
financing
Management of liquid resources -
Term deposits - (37,002)
Financing
Capital element of finance
lease rentals (53) (12) (146)
Issue of shares - 31,694 95,892
Bank loans - 300
Share issue costs - (3,970)
Repayment of borrowings - - (15,703)
Net cash inflow/(outflow) from
financing (53) 31,682 76,373
Increase in cash in the period 5,717 19,668 18,176
Sportsworld Media Group plc
Unaudited statement of total recognised gains and losses
for the six months ended 31 December 2000
6 months to 6 months to Year
to
31 December 31 December 30
2000 1999 June
2000
#'000 #'000 #'000
Profit for the financial period 5,264 635 2,809
Currency differences on foreign currency 357 54 (1,214)
Total gains and losses recognised since the last
financial statements 5,621 689 1,595
Sportsworld Media (LSE:SWD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sportsworld Media (LSE:SWD)
Historical Stock Chart
From Jul 2023 to Jul 2024
