Catalyst Media : CMG – Interim Dec 2021 FINAL pdf 300.5 KB

30 March 2022

Catalyst Media Group Plc

("CMG", "Catalyst" or the "Company")

Interim Results for the Six Months Ended 31 December 2021

The Board of CMG (AIM: CMX) is pleased to announce the Company's unaudited interim results for the six months ended 31 December 2021.

CMG is a 20.54% shareholder in Sports Information Services (Holdings) Limited ("SIS") and the results include its share in the profits/(losses) of SIS as an equity accounted associate.

Financial Highlights for the six months to 31 December 2021

• • CMG profit after taxation of £0.45 million (2020: loss of £0.43 million)

• • Earnings per share of 2.14p (2020: loss of 2.03p)

• • Net asset value per share of 54.5p (2020: 58.7p)

• • For the six months to 30 September 2021, SIS achieved

  • - Revenues of £113.4 million (2020: £68.6 million)

  • - Operating profit of £3.0 million (2020: loss of £2.4 million)

  • - Profit after tax on ordinary activities of £2.4 million (2020: loss of £1.9 million)

• • SIS did not declare or pay any dividends to CMG during the reporting period or during the prior period.

• • CMG has not declared nor paid any dividends during the reporting period or during the prior period.

Current Trading and Outlook

Following the relaxation of COVID-19 restrictions in May 2021, SIS's UK and Irish retail business has returned to normal operations whilst the Digital business has continued to operate at levels higher than pre-COVID-19 and has seen significant growth in its customer base. Additionally, the business has continued to scale its latest products of Competitive Gaming (e-sports) and Numbers draws.

SIS's profitability for its current financial year to 31 March 2022 is anticipated to see a significant rebound and, SIS's management expects the company to make a profit for the year as a whole in excess of its budget.

Enquiries:

Catalyst Media Group Plc

Michael Rosenberg, Non-executive Chairman	Mob: [phone]
Melvin Lawson, Non-executive Director	Tel: [phone]
Strand Hanson Limited	Tel: [phone]
James Harris / Matthew Chandler

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.

Chairman's Statement

For the six month period ended 31 December 2021, the Company achieved a net profit after taxation of £0.45 million (2020: loss of £0.43 million).

Net assets as at 31 December 2021 were £11.5 million (30 June 2021: £11.0 million). Net cash as at 31 December 2021 was £0.2 million (30 June 2021: £0.2 million).

CMG's main asset remains its 20.54% stake in SIS and the Company received no dividend from SIS during the reporting period or the prior period. The value of CMG's investment in SIS has reduced from approximately £12.1 million to approximately £11.3 million, due to its share of the loss incurred in the year to 30 June 2021, albeit its share of the profit earned in the period to 31 December 2021 has slightly improved the investment value. As a result, CMG's net assets per share as at 31 December 2021 were 54.5p (2020: 58.7p). The carrying value of our investment in SIS will be reviewed again at our financial year end.

CMG equity accounts for its share in the profit of SIS which was £2.4 million after tax for its six month period to 30 September 2021 (2020: loss of £1.9 million). SIS's revenues for such period were £113.4 million (2020: £68.6 million) which were derived from its business of providing integrated television and data services to Licensed Betting Offices in the UK, Ireland and overseas. SIS generated an operating profit for this period of £3.0 million, compared to an operating loss of £2.4 million in the comparable period for 2020.

CMG currently has cash reserves of approximately £0.2 million which is sufficient for its present needs.

Set out below is an overview of the activities of SIS's key divisions for the period under review.

SIS - UK and Ireland Retail

SIS continues to provide a core service including Racecourse Media Group horseracing, the SIS British Greyhound Service, Irish Horseracing, Chelmsford City Horseracing, 49's and International Horseracing to almost the entire UK and Irish retail market, including all the major UK bookmaking groups and the majority of the independent market.

As previously reported, in June 2021 SIS extended its rights agreement with Racecourse Media Group for UK Retail Horseracing rights for a further 3 years through to March 2026 and has already secured two extended contracts for major customers of this content.

In the period, SIS has secured renewed contracts for over 98% of its UK and Irish Independent Retail Bookmaker customers whose contracts were scheduled to expire.

Additionally, SIS supplies further content and services to its UK and Irish retail customers to cover early morning and evening products and has renewed several existing arrangements.

SIS - International & Online

SIS has seen continued growth in both existing customer revenues and its customer base for its 24/7 racing channels covering horseracing, greyhound racing, virtual racing and mixed channels and has improved the user experience. SIS now has over 50 channels with customers designed to maximise betting opportunities for international retail and online operators and has signed-up numerous international and online operators to multi-year agreements. SIS continues to progress its strategy to increase distribution, in both new and existing international and online markets, using proprietary production technology, as well as ultra-low latency streaming and data pricing services.

The numbers products online, operated under the 49's brand, has grown significantly in the period, driven by a combination of increased customers and an expanded product range, and complemented by the upgrade of the 49s.co.uk website which has driven affiliates revenue.

The SIS Competitive Gaming (e-sports) service, which was launched during lockdown in May 2020, has continued to scale the number of events created and increase revenues with new customers onboarding in the period. The business subsequently launched an eFootball title service in December 2021

In June 2021, SIS completed an initial investment in, and long-term partnership arrangement with, Racelab Pty Limited, a racing data science company in Australia, which adds a range of market leading products acrossthe SIS portfolio of international horse and greyhound racing which has expanded the range of trading products available for online customers internationally and in the UK.

India

An arbitration award was made in July 2020 which the respondent has paid into court. These funds are now subject to appeals in the Delhi High Court by both parties: SIS continues to pursue claims disallowed by the arbitrators whilst the respondent attempts to nullify the award in its entirety. The overall outcome therefore remains uncertain.

The legal and associated costs relating to this claim have been significantly reduced but are still impacting SIS's profits.

Litigation

As previously announced on 9 October 2020, in the case brought by The Racing Partnership ("TRP") and others against SIS's subsidiary, Sports Information Services Limited ("SISL"), and others, the Court of Appeal handed down judgment in relation to the appeals against various elements of the High Court judgment of Mr Justice Zacaroli in respect of liability issues. The Court of Appeal:

(1) Upheld SISL's appeal in relation to the finding of breach of confidence in relation to certain race day data supplied to SISL by a co-defendant; and

(2) Upheld TRP's appeal against the dismissal of its claims for unlawful means conspiracy.

The Court of Appeal was concerned only with the appeals on the liability findings and consequently made no ruling as to damages.

SIS has applied to the Supreme Court and has been granted an appeal hearing which is currently expected to be held in the summer of 2022.

Current Trading and Outlook

Following the relaxation of COVID-19 restrictions in May 2021, SIS's UK and Irish retail business has returned to normal operations whilst the Digital business has continued to operate at levels higher than pre-COVID-19 and has seen significant growth in the customer base. Additionally, the business has continued to scale its latest products of Competitive Gaming (e-sports) and Numbers draws.

SIS's profitability for its current financial year to 31 March 2022 is anticipated to see a significant rebound and SIS's management expects the company to make a profit for the year as a whole in excess of its budget.

SIS's cash position has returned to approximately £58m as at 28 February 2022 and its working capital position has returned to more normal levels.

As a result of the COVID-19 uncertainty, SIS has deferred any dividend this reporting period and will next consider a dividend later in 2022.

CMG operates at a very low level of overheads and the directors consider that it has sufficient working capital for its current needs.

Michael Rosenberg OBE

Chairman

29 March 2022

Consolidated interim statement of comprehensive income

Notes

6 months to	6 months to	12 months
31 December	31 December	to 30 June
2021	2020	2021
£	£	£
Unaudited	Unaudited	Audited
Revenue	12,500	12,500	25,000
Cost of sales	-	-	-
Gross profit	12,500	12,500	25,000
Administrative expenses	(60,049)	(49,424)	(130,029)
Operating loss	(47,549)	(36,924)	(105,029)
Financial income	9	13	23
Net financial income	9	13	23
497,890	(384,303)	(1,470,048)
450,350	(421,214)	(1,575,054)
-	(4,934)	(4,934)
450,350	(426,148)	(1,579,988)
-	-	(188,352)
450,350	(426,148)	(1,768,340)
450,350	(426,148)	(1,768,340)
2.14p	(2.03p)	(7.51p)
2.14p	(2.03p)	(7.51p)

Share of associate

profit/(loss)Profit/(loss) before taxation

Taxation

Profit/(loss) for the period

ofequity-accounted 3

Share of other comprehensive profit of associate

Total comprehensive income/(loss) for the period

Attributable to equity holders of the company

Earnings/(loss) per share: 4 Basic

Diluted

Consolidated interim statement of financial position

Notes	31 December	31 December	30 June
2021	2020	2021
£	£	£
Unaudited	Unaudited	Audited
Assets
Non-current assets
Investment in associate	3	11,314,470	12,090,677	10,816,580
11,314,470	12,090,677	10,816,580
Current assets
Trade and other receivables	40,976	35,734	57,312
Cash and cash equivalents	165,849	260,020	167,830
206,825	295,754	225,142
Total assets	11,521,295	12,386,431	11,041,722
Equity and liabilities
Capital and reserves
attributable to equity
holders of the parent
Share capital	2,103,202	2,103,202	2,103,202
Capital redemption reserve	711,117	711,117	711,117
Merger reserve	2,402,674	2,402,674	2,402,674
Retained profits	6,235,910	7,127,752	5,785,560
11,452,903	12,344,745	11,002,553
Current liabilities
Trade and other payables	68,392	41,686	39,169
68,392	41,686	39,169
Total equity and liabilities	11,521,295	12,386,431	11,041,722