Interim Results
Parallel Media Group PLC
30 June 2003
30 June 2003
Parallel Media Group plc
Interim Results for the period ended 31 December 2002
Chairman's statement
The Company today announces its un-audited results for the six month period
ended 31 December 2002. There is no dividend recommendation.
Turnover for the period was £16.7 million (6 months ended 30 December 2001:
£18.5 million). This generated an operating loss after goodwill and exceptional
administrative expenses of £9.2 million (6 months ended 30 December 2001: £75.7
million) and an overall loss for the period of £9.6 million (6 months ended 30
December £77.2 million). The adjusted loss per share was 2.16 pence (6 months
ended 30 December 2001: Earnings Per Share 3.84 pence). The net liabilities as
at 31 December 2002 equalled £7.2 million (as at 30 December 2001: Net assets of
£8.9 million). The net debt as at 31 December 2002 stood at £1.1 million (as at
30 December 2001: £1.3 million).
In my statement accompanying the interim accounts for the six months to 30 June
2002, I set out the Company's plans to dispose of those Group companies that are
primarily involved with football and cricket to focus on its strengths and
existing rights ownership in professional golf. I am pleased to confirm that
these disposals took place on 21st January 2003 and I shall be giving more
detail regarding this transaction in my statement accompanying the Company's
audited financial statements for the period ended 22nd January 2003 (the
Company's new accounting reference date) which will be published in July 2003.
These unaudited interim accounts therefore represent the performance of the
total business formerly known as The World Sport Group Plc prior to the
disposals mentioned above. In preparing these interim accounts, difficulties
have been encountered in obtaining full and reliable information for certain of
the Group's (now disposed of) subsidiaries and which form part of the
Discontinued Operations set out in the results. Estimates have therefore been
made where necessary in the preparation of these accounts.
As a consequence of January 2003's disposal of The World Sport Group Ltd, the
capital reconstruction and the open offer, the net assets, share capital and
reserves recorded in the consolidated Group balance sheet as at 22nd January
2003 will be substantially different to those which form part of these results.
As at the date of these Financial Statements, the net liabilities of the
disposed of businesses was estimated to be in the region of £11 million. An
impairment review of the carrying value of goodwill will be carried out at that
date. All restructuring costs relating to the disposals will be reflected in
the period to 22nd January 2003.
Trading in the period covered by these results continued to suffer from the
difficult market conditions experienced in the first half of the year. I shall
be providing a fuller explanation of trading performance with the Group's full
year results along with a commentary on current market conditions and the
current performance of the restructured business.
David Ciclitira
Chairman
Parallel Media Group plc
Interim Results for the period ended 31 December 2002
Consolidated profit and loss account for the 6 months ended 31 December 2002
6 months ended 6 months ended
31 December 2002 30 December
2001
Continuing Discontinued Total Total
Operations
Note £'000s £'000s £'000s £'000s
Turnover 7,904 8,790 16,694 18,464
Cost of sales (6,028) (7,086) (13,114) (7,213)
Gross Profit 1,876 1,704 3,580 11,251
Administrative Expenses (3,655) (9,110) (12,765) (86,968)
Other operating income - - - 15
Operating (loss)/profit before goodwill (1,246) (4,987) (6,233) 2,156
Impairment of goodwill - (1,784) (1,784) (74,065)
Goodwill amortisation (275) - (275) (1,607)
Administrative expenses - exceptional 2 (258) (635) (893) (2,186)
Operating loss (1,779) (7,406) (9,185) (75,702)
Share of operating profit/(loss) in 16 (868) (852) (969)
associates
Exceptional items - Cost of fundamental
restructuring - - - (362)
Loss on ordinary activities before interest
and tax (1,763) (8,274) (10,037) (77,033)
Interest receivable - 138 138 181
Interest payable (8) (299) (307) (375)
(Loss)/profit on ordinary activities before (1,771) (8,435) (10,206) (77,227)
tax
Tax on (loss)/profit on ordinary activities - (2) (2) (16)
(Loss)/profit on ordinary activities after (1,771) (8,437) (10,208) (77,243)
tax
Minority interest - 599 599 70
(Loss)/profit for the financial period (1,771) (7,838) (9,609) (77,173)
(Loss)/earnings per share
- basic and diluted 3 (16.78p) (169.11p)
- adjusted 3 (2.16p) 3.84p
Parallel Media Group plc
Interim Results for the period ended 31 December 2002
Consolidated balance sheet at 31 December 2002
Group
31 December 2002 30 December 2001
£'000 £'000
Fixed Assets
Intangible assets 10,451 11,007
Tangible assets 990 1,100
Investments 690 1,756
12,131 13,863
Current Assets
Debtors - due within one year 14,638 16,512
- due after one year - 1,169
14,638 17,681
Cash - 2,305
14,638 19,986
Creditors: amounts falling due within one year (29,397) (19,656)
Net current (liabilities)/assets (14,759) 330
Total assets less current liabilities (2,628) 14,193
Creditors: amounts falling due after one year (1,147) (26)
Provision for liabilities and charges (3,453) (5,301)
Net (liabilities)/assets (7,228) 8,866
Capital and reserves
Called up share capital 11,453 11,453
Share premium account 24,277 24,277
Other reserves 5,591 5,591
Profit and loss account (48,403) (32,352)
Shareholders' funds - equity (7,082) 8,969
Minority interest - equity (146) (103)
(7,228) 8,866
The financial statements, which are unaudited, were approved by the board of
directors on 30th June 2003.
Parallel Media Group plc
Interim Results for the period ended 31 December 2002
Notes forming part of the financial statements for the 6 months ended 31
December 2002
1. Accounting policies
The financial statements have been prepared on the basis of the accounting
policies as set out in the Group's 2001 statutory accounts, save for the
implementation of FRS 19 Deferred Tax, the effect of which is not material in
the period. Comparative figures have been given for period ended 30 December
2001 as they are the latest audited financial statements available.
The figures for the period ended 30 December 2001 do not constitute statutory
accounts as they have been extracted from the statutory accounts which were
filed with the Registrar of Companies. The auditors' report on those financial
statements which was issued on 23 December 2002 was unqualified but contained a
reference to a fundamental uncertainty, details of which are shown below. The
auditors' report did not contain any statement under section 237 of the
Companies Act 1985.
'Basis of preparation - Going concern
The financial statements have been prepared on a going concern basis which
assumes that the Group will continue in operational existence for the
foreseeable future. The directors intend to raise the necessary funding to meet
the Group's immediate requirements from an Open Offer, details of which are
included in a document issued to shareholders today. The prospectus also
outlines a proposed disposal of certain subsidiaries in order to reduce the
funding requirement for the Group. The financial statements do not include any
adjustments which would be required if the proposed disposal were not approved
by the shareholders or if the necessary funds from the Open Offer were not
received.'
2. Exceptional administrative items
The exceptional items of £893,000 included in administrative expenses, comprise
the provision against a long term debtor balance of £258,000 (included in
continuing operations) and the loss on the sale of an associated undertaking of
£635,000 (included in discontinued operations).
In the period ended 30 December 2001 the exceptional items included in
administrative expenses of £2,186,000 comprised provisions against balances due
from associated undertakings of £1,629,000 (£323,000 of which is included in
discontinued operations) redundancy costs of £143,000, £208,000 of costs
incurred in the acquisition of World Sport Group Ltd and Parallel Media Group
International Ltd, and £206,000 of aborted deal costs.
Parallel Media Group plc
Interim Results for the period ended 31 December 2002
Notes forming part of the financial statements for the 6 months ended 31
December 2002 (Continued)
3. (Loss)/earnings per share
6 months ended 6 months ended
31 December 30 December
2002 2001
(i) Basic
Loss for the financial period (£9,609,000) (£77,173,000)
Number of shares in issue (weighted average as adjusted
for in
the 1:200 consolidation in August 2001) 57,263,281 45,635,327
Loss per share (16.78p) (169.11p)
(ii) Diluted
Diluted loss and earnings per share is calculated on the same basis as basic
loss and earnings per share because the effect of the potential ordinary shares
(share options) reduces the net loss per share and is therefore anti-dilutive.
(iii) Adjusted earnings per share
The adjusted earnings per share figure shown below is calculated on attributable
profit excluding goodwill, discontinued operations, exceptional items included
in administrative expenses, and exceptional items included after operating
profit. This calculation has been used as it is deemed to give a more
appropriate indication of the earnings of the continuing operations of the
Group.
6 months ended 6 months ended
31 December 2002 30 December 2001
EPS Earnings EPS Earnings
Pence £'000s Pence £'000s
Basic loss per share (16.78p) (9,609) (169.11p) (77,173)
Impairment of goodwill (continuing operations only) - - 162.30p 74,065
Amortisation of goodwill 0.48p 275 3.52p 1,607
Discontinued operations - 2002 13.69p 7,838 - -
Discontinued operations - 2001 - - 3.05p 1,393
Administrative expenses - Exceptional (continuing
operations only) 0.45p 258 4.08p 1,863
Adjusted earnings per share (2.16p) (1,238) 3.84p 1,755
The discontinued operations figure shown in 2001 has not been restated to
reflect comparability with the 2002 figure.
Parallel Media Group plc
Interim Results for the period ended 31 December 2002
Notes forming part of the financial statements for the 6 months ended 31
December 2002 (Continued)
4. Post balance sheet events
On 21st January 2003, the Company sold its holding of shares in the World Sport
Group Ltd and its subsidiaries to Park House Holdings Ltd. The consideration
paid by Park House Holdings Ltd comprised cash of £1 million, the capitalisation
of the loans made by Park House Holdings Ltd to the Company into Deferred Shares
and the re-designation of the Ordinary Shares, to which Park House Holdings Ltd
was entitled pursuant to the capital reconstruction, as Park House Deferred
Shares which were subsequently cancelled.
Details of the open offer and the capital reconstruction, together with further
details of the disposal, are included the prospectus issued to shareholders in
December 2002.
5. Other
Copies of unaudited interim financial statements have not been sent to
shareholders, however copies are available on request from the Company Secretary
at the company's Registered Office: 56 Ennismore Gardens, London SW7 1AJ.
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