RNS Number : 1826K
Catalyst Media Group PLC
31 December 2020
 

31 December 2020

 

Catalyst Media Group plc

("CMG" or the "Company")

 

Final Results for the year ended 30 June 2020

Notice of Annual General Meeting ("AGM")

 

The Board of Catalyst Media Group plc is pleased to announce the final results for the Company for the year ended 30 June 2020. CMG is a 20.54% shareholder in Sports Information Services (Holdings) Ltd ("SIS") and the results for the year to 30 June 2020 incorporate its share of the profits of SIS for its year ended 31 March 2020.

 

Financial overview

· CMG loss before taxation £1.1 million (following an impairment charge of £1.2 million of the carrying value of the interest in SIS) (2019: loss of £0.6 million following £4.3 million impairment charge)

· Loss per share 5.27p (2019: loss per share 2.80p)

· Net asset value per share 60.7p (2019: 67.7p)

· SIS approved and paid a dividend of £5.0 million on 31 October 2019 to its shareholders

o On receipt of its share of the SIS dividend, being £1.03 million, the Board of CMG approved the distribution of £1.05 million to CMG's shareholders by way of a dividend of 5p per share

· SIS revenues for the year ended 31 March 2020 £212.6 million (2019: £241.4 million)

· SIS operating profit, prior to litigation fees, of £3.6 million (2019: £7.4 milliuon)

 

Notice of AGM

The Annual Report and Accounts for the year ended 30 June 2020, together with the notice of AGM and form of proxy, will shortly be available on the Company's website at www.cmg-plc.com .

 

The AGM is to be held at 6 Stratton Street, London W1J 8LD on 10 February 2021 at 10.00 a.m. In light of the current Covid-19 situation, the General Meeting will be held as a closed meeting.

 

Enquiries:

 

Catalyst Media Group Plc

Michael Rosenberg, Non-executive Chairman  07785 727 595

Melvin Lawson, Non-executive Director                                        020 7734 8111

 

Strand Hanson Limited                                                                020 7409 3494

James Harris / Matthew Chandler / Jack Botros

 

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.

 

Chairman's Statement

 

I am pleased to present the results for Catalyst Media Group plc ("CMG" or the "Company") for the year ended 30 June 2020, which incorporates our share of profits for Sports Information Services (Holdings) Ltd ("SIS") in which CMG has a 20.54% interest.

 

The main asset of CMG continues to be the 20.54% shareholding in SIS, which, as detailed below. CMG equity accounts for its share in the profits of SIS.

 

After taking account of CMG's share in the profits of SIS for its year ended 31 March 2020 of £0.13 million (2019: £3.8 million), CMG recorded a loss before taxation of £1.1 million (2019: loss of £0.6 million), following an impairment charge of £1.2 million of its carrying value of its interest in SIS (2019: £4.3 million). Net assets at the year end were £12.8 million (60.7p per share) (2019: £14.7 million (69.7p per share)).

 

The Board of CMG (the "Board") has reviewed its investment in SIS and has taken account of the current trading position of SIS. As announced in June 2020 and November 2020, SIS's operations have been impacted as a result of Covid-19. The disruption to racing since mid-March 2020, together with the closure of licensed Betting offices at various stages during the year, has and continues to impact on SIS's trading in its current financial year. Accordingly, whilst SIS has sought to take steps to mitigate the effects of Covid-19 which are referred to later, SIS's management has informed the Company that they expect that SIS will be loss-making in its current financial year ending 31 March 2021. However, SIS's management believe that the digital and international opportunities which are now being successfully implemented should enable SIS to return to profitability in subsequent years. Accordingly, and notwithstanding SIS's management's view of the future opportunities available to SIS, taking into account the impact of Covid-19 on the operations of SIS, and the uncertainties concerning the future possible liability that may arise from the TRP litigation, the Board of CMG has decided to reduce the valuation of its investment in SIS from £13.6 million to £12.5 million.

 

As previously reported, SIS paid a dividend of approximately £5.0 million to its shareholders in October 2019, of which £1.03 million was received by CMG.  Upon receipt of such funds and taking into account the Company's position at that time, the Company distributed a total of £1.1 million to shareholders via a dividend of 5p per share in November 2019.

 

SIS Betting - UK and Ireland Retail

 

SIS continues to provide a core service based on content from Racecourse Media Group horseracing, SIS British Greyhound Service, Irish Horseracing, Chelmsford City Horseracing, 49s and International Horseracing on mid and long-term agreements to almost the entire UK and Irish retail market, including all the major UK bookmaking groups and the majority of the independent market.

 

Additionally, SIS supplies additional content and services to its UK and Irish retail customers to cover early morning and additional evening products and has recently extended these services adding Mexican greyhound racing and renewing several existing arrangements.

 

SIS Betting - International & Online

 

In the year SIS has continued to progress development of its 24/7 racing channels covering horseracing, greyhound racing, virtual racing and mixed channels, with additional content and improved user experience. SIS now has over 35 channels with customers designed to maximise betting opportunities for international retail and online operators and has signed 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.

 

In addition, this year saw the launch of the SIS Competitive Gaming (e-sports) service during the lockdown in May with commitment to customers for multiple 24/7 service channels.

 

SIS Results

 

As announced on 19 November 2020, SIS's profit before tax for the year ended 31 March 2020, was £0.8 million.

 

SIS's cash balance as at 31 March 2020 was approximately £60.1 million and there has been no dividend declared nor paid by SIS since the end of its financial year.

 

The results of SIS for the year ended 31 March 2020 are as follows:

 

 

31 March 2020

31 March 2019

 

Before individually significant items*

Individually significant

Items*

Total

Before individually significant items*

Individually significant

Items*

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

Turnover

-

212,593

241,404

-

241,404

Operating expenses

(3,577)

(212,552)

(234,018)

(5,147)

(239,165)

Group operating profit

(3,577)

41

7,386

(5,147)

2,239

Profit on disposal of operations

-

-

17,836

-

17,836

Other interest receivable and similar income

-

756

619

-

619

Interest payable and similar expenses

-

(1)

(6)

-

(6)

Profit before taxation

(3,577)

796 

25,835

(5,147)

20,688

Tax on profit

509

(186)

(3,391)

978

(2,413)

Profit after taxation

(3,068)

610

22,444

(4,169)

18,275

Other comprehensive income

-

1,279

4,458

-

4,458

Total comprehensive income

(3,068)

1,889

26,902

(4,169)

22,733

 

Notes: *Individually significant items relate to litigation fees.

 

Share of net assets and liabilities of associate

 

 

 

31 March 2020

31 March 2019

Total assets

97,150

119,521

Net liabilities

(36,428)

(55,688)

Net assets

60,722

63,833

 

India

 

As previously reported, the claim in respect of the Indian project continues to be pursued but the outcome remains uncertain. The legal and associated costs relating to this claim have been significantly reduced but are still impacting profits. SIS have accounted for legal costs as they arose.

 

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 in the Case as follows:

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.

 

There has been no ruling given towards damages and SIS has, after consultation with its advisors, sought an appeal to the Supreme Court which it expects to happen in late 2021 if granted.

 

Current Trading

 

As previously announced on 17 June 2020 and 19 November 2020, SIS's operations were impacted between mid-March 2020 and June 2020, following the outbreak of Covid-19. Following the cancellation of horse and greyhound racing from mid-March 2020, SIS saw the resumption of horse and greyhound racing in England from 1 June 2020 and horseracing in Ireland from 8 June 2020, with the reopening of Licenced Betting Offices in England from 15 June 2020 resulting in a return to full operations at SIS.

 

Further Covid-19 restrictions started to be implemented in October and November 2020, as a result of which SIS saw further temporary closure of the majority of the retail Licensed Betting Offices which it provides services to. SIS continues to be able to provide content for its customers during this time and has sought to offset revenue shortfalls from retail with increased digital revenues.

 

With the uncertainty and tiering system likely to continue through to the end of SIS's financial year in March 2021, SIS's management believes that there remains significant uncertainty as to when retail markets will reopen in full.

SIS's profitability for the year to March 2021 has been significantly impacted by Covid-19 and SIS's management expects to make a loss for the current financial year, although the magnitude of the loss is currently difficult to forecast given the uncertain nature of the retail market return.

 

Despite the impact of Covid-19, SIS has continued to see growth in its International and online customer base, most recently launching channels for Latin American and European customers, and has seen the launch of its Competitive Gaming (esports) product as well as increased benefit from the acquisition of the 49's business completed earlier in the year.

 

Outlook

 

As stated above, SIS's management have informed the Company that they expect SIS to make a loss for the year ending March 2021 and, accordingly, cash reserves are expected to be lower than in previous years, though SIS's management expect that they will however remain significant. 

 

SIS has successfully handled the significant disruptions from Covid-19 during 2020, which has particularly impacted the retail customer business. Whilst SIS expects to make a loss for the year ending March 2021 there has been significant acceleration of growth in customers in its online business, which together with more opportunities opening up internationally, provides diversification of its activities and underpins the business for the future.

 

As a result of Covid-19 uncertainties, SIS has deferred any dividend this financial year but will consider a dividend next financial year.

 

CMG continues to be cash positive and operated at very low overhead levels.

 

AGM

 

The next Annual General Meeting of CMG will take place on 10 February 2021.  Formal Notice of the meeting is set out at the end of the report and accounts together with the form of proxy.

 

Michael Rosenberg OBE

Chairman

 

30 December 2020

 

 

Strategic Report

 

The Directors present their strategic report for the year ended 30 June 2020.

 

Principal activities and review of the business

 

The principal activities of the business are outlined and reviewed in the Chairman's Statement. A review of the business is included within the Chairman's Statement.

 

Principal risks and uncertainties

 

Investment in SIS

 

The principal strategic investment of the Group is its 20.54% holding in SIS. The Group is entitled to appoint one director to the board of SIS which currently comprises eight directors, of which five are appointed by shareholders, two are independent and one is the Chairman. Although it can influence the board on strategic decisions, the Group is not in a position to control the day-to-day business and affairs of SIS other than with the support of other directors and a majority of shareholders of SIS.

 

There are a number of risks and uncertainties associated with the business of SIS which could potentially have an adverse impact on the value of the Group's investment. At a technical level this includes the fact that the customers of SIS rely upon real time data and uninterrupted content delivery. Loss of content would result in reduced quality of services and potentially reduced income. Therefore SIS has adopted advanced disaster recovery solutions and has built back up facilities which are located around the country.

 

Financial risk

 

The Group is subject to financial risk through its exposure to financial assets and liabilities. The Group's main financial risk is its exposure to its investment in SIS.

 

Credit risk

 

The Group is not exposed to any credit risk.

 

Liquidity risk

 

There is a very low risk that the Group will encounter difficulty in meeting its financial obligations as they fall due, on the basis that the Group operates with minimal overheads and cash flow is well managed.

 

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The principal liabilities of the Group and Company arise in respect of administrative expenditure and trade and other payables. Trade and other payables are all payable within three months.

 

The Board receives cash flow projections on a regular basis as well as information on cash balances.

 

Key Performance Indicators (KPIs)

 

The Company's key performance indicators used by the Board in monitoring the general performance of the Group and its investments are:

 

 

Net asset value per share

 

The net asset value per share of the Group was 61 pence as at 30 June 2020 (2019: 70 pence). The net asset value per share decreased slightly during the year to 30 June 2020. The net asset value of the Group as at 30 June 2020 and 30 June 2019 is shown in the Group's consolidated statement of financial position on page 20.

 

Administrative expenses

 

The Directors closely monitor the anticipated overheads for the Group and ensure that these are kept to a minimum.

 

Earnings per share (EPS)

 

EPS shows the relative performance year-on-year of the Group's profitability measured as an amount of profit or loss attributable to one ordinary share. The calculation of earnings per share is based on the weighted average number of issued ordinary shares in issue for the financial year and the profit/(loss) after taxation attributable to ordinary shareholders. EPS in respect of operations for the year and the previous year is shown in the Group consolidated statement of comprehensive income on page 19.

 

Key Performance Indicators of Associate

 

The Directors additionally monitor the performance of SIS in order to evaluate the general performance of the Group.

 

 

Michael Rosenberg OBE

Chairman

 

30 December 2020

 

 

 

Consolidated statement of comprehensive income for the year ended 30 June 2020

 

 

 

Year

Year

 

 

ended

ended

 

 

30 June

30 June

 

 

2020

2019

 

Note

£

£

 

 

 

 

Revenue

3

25,000

25,000

 

 

 

 

Cost of sales

 

-

-

 

 

 

 

Gross profit

 

25,000

25,000

 

 

 

 

Administrative expenses

 

(123,600)

(119,411)

 

 

 

 

Operating loss

 

(98,600)

(94,411)

 

 

 

 

Financial income

9

712

5,312

Financial costs

10

-

-

Net financial income

 

712

5,312

 

 

 

 

Share of profit of equity-accounted associate, net of tax

2

125,294

3,753,685

Impairment of equity-accounted associate

 

(1,160,843)

(4,270,701)

 

 

 

 

Loss before taxation

 

(1,133,437)

(606,115)

 

 

 

 

Taxation

11

25,583

16,623

 

 

 

 

Loss for the year

 

(1,107,854)

(589,492)

 

 

 

 

Share of other comprehensive profit of associate

2

262,707

915,673

 

 

 

 

Total comprehensive loss for the year

 

(845,147)

326,181

 

 

 

 

Attributable to equity holders of the Company

 

(845,147)

326,181

 

 

 

 

Loss per share:

 

 

 

 

 

 

 

Basic

12

(5.27p)

(2.80p)

 

 

 

 

Diluted

12

(5.27p)

(2.80p)

 

 

 

Consolidated statement of financial position as at 30 June 2020

 

 

Note

30 June

2020

£

30 June

2019

£

Assets

 

 

 

Non-current assets

 

 

 

Investment in associate

2

12,474,980

14,274,706

 

 

 

 

 

 

12,474,980

14,274,706

 

 

 

 

Current assets

 

 

 

Trade and other receivables

14

62,741

39,007

Cash and cash equivalents

15

270,654

383,612

 

 

 

 

 

 

333,395

422,619

 

 

 

 

Total assets

 

12,808,375

14,697,325

 

 

 

 

Equity and liabilities

 

 

 

 

 

 

 

Capital and reserves attributable to equity holders of the parent

 

 

 

Share capital

16

2,103,202

2,103,202

Capital redemption reserve

 

711,117

711,117

Merger reserve

 

2,402,674

2,402,674

Retained profits

 

7,553,900

9,450,670

 

 

 

 

Total equity

 

12,770,893

14,667,663

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

18

37,482

29,662

Corporation tax payable

19

-

-

 

 

37,482

29,662

 

 

 

 

Total equity and liabilities

 

12,808,375

14,697,325

 

 

 

 

 

 

The financial statements were approved by the Board of Directors and authorised for issue on 30 December 2020.

 

Michael Rosenberg OBE

Director

 

 

 

Consolidated statement of changes in equity for the year ended 30 June 2020

 

 

Attributable to equity holders of the Group

 

 

30 June 2020

Share

Capital

Share

Premium

Capital

Redemption Reserve

Merger

Reserve

Retained

Profits

Total

Shareholders

Equity

 

£

£

£

£

£

£

At 1 July 2019

2,103,202

-

711,117

2,402,674

9,450,670

14,667,663

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

(1,107,854)

(1,107,854)

Other comprehensive income:

 

 

 

 

 

 

Share of other comprehensive profit of associate

-

-

-

-

262,707

262,707

Total comprehensive profit for the period

 

-

 

-

(845,147)

(845,147)

Dividends paid

 

 

 

 

(1,051,623)

(1,051,623)

At 30 June 2020

2,103,202

-

711,117

2,402,674

7,553,900

12,770,893

 

The following describes the nature and purpose of each reserve within owners' equity:

 

Share capital

Amount subscribed for shares at nominal value.

Share premium

Amount subscribed for share capital in excess of nominal value.

Capital redemption reserve

Amounts arising from the purchase by the group of its own shares.

Merger reserve

Amounts arising from the merger of subsidiary investments.

Retained profits

Cumulative profit of the Group attributable to equity shareholders.

 

 

 

Attributable to equity holders of the Group

 

 

30 June 2019

Share

Capital

Share

Premium

Capital

Redemption Reserve

Merger

Reserve

Retained

Profits

Total

Shareholders

Equity

 

£

£

£

£

£

£

At 1 July 2018

2,103,202

-

711,117

2,402,674

21,323,087

26,540,080

 

 

 

 

 

 

 

Loss for the year

-

-

-

-

(589,492)

(589,492)

Other comprehensive income

 

 

 

 

 

 

Share of other comprehensive profit of associate

-

-

-

-

915,673

915,673

Total comprehensive profit for the period

-

-

-

-

326,181

326,181

Dividends paid

 

 

 

 

(12,198,598)

(12,198,598)

At 30 June 2019

2,103,202

-

711,117

2,402,674

9,450,670

14,667,663

 

 

 

Consolidated statement of cash flows for the year ended 30 June 2020

 

 

 

Note

Year ended

30 June

2020

£

Year ended

30 June

2019

£

 

 

 

 

 

 

 

 

Cash flow from operating activities

 

 

 

(Loss) / profit before taxation

 

(1,133,437)

(606,115)

Adjustments for:

 

 

 

Share of profit from associate

 

(125,294)

(3,753,685)

Impairment of investment in associate

 

1,160,843

4,270,701

Finance income

 

(712)

(5,312)

Corporation taxes recovered

 

-

4,365

 

 

 

 

Net cash flow used in operating activities before changes in working capital

 

(98,600)

(90,046)

Increase in trade and other receivables

 

1,849

1,229

Decrease in trade and other payables

 

7,820

(579)

 

 

 

 

Net cash flow used in operating activities

 

(88,931)

(89,396)

 

 

 

 

Investing activities

 

 

 

Dividend received

 

1,026,884

8,214,659

Interest received

 

712

5,312

 

 

 

 

Net cash flow from investing activities

 

1,027,596

8,219,971

 

 

 

 

Financing activities

 

 

 

Dividends paid

 

(1,051,623)

(12,198,598)

 

 

 

 

Net cash flow used in financing activities

 

(1,051,623)

(12,198,598)

 

 

 

 

Net decrease in cash and cash equivalents in the year

 

(112,958)

(4,068,023)

Cash and cash equivalents at the beginning of the year

 

383,612

4,451,635

 

 

 

 

Cash and cash equivalents at the end of the year

15

270,654

383,612

 

 

 

 

 

 

 

Notes to the financial statements

 

1.  Basis of preparation and significant accounting policies

 

These consolidated financial statements of Catalyst Media Group plc have been prepared in accordance with accepted International Financial Reporting Standards (IFRSs), International Accounting Standards (IAS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations (collectively "IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies listed below include those applicable to SIS, given its materiality to the Group as a whole.

 

Catalyst Media Group plc is a publicly limited company registered in England and Wales where it is domiciled for tax purposes.

 

The financial statements are prepared under the historical cost convention.

 

These results are audited, however the financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 30 June 2020, but is derived from the 2020 Report and financial statements. The auditors have issued an unqualified audit report in respect to these financial statements.

 

Going concern

 

The Directors can report that based on the Group's budgets and financial projections, they have satisfied themselves that the business is a going concern. In assessing the Group as a going concern, the Directors are also mindful of the business of SIS, that provides the entire value of the Group. The Directors are satisfied that SIS is a going concern. The Board has a reasonable expectation that the Company and Group have adequate resources and facilities to continue in operational existence for the foreseeable future and therefore the accounts are prepared on a going concern basis.

 

2.  Investment in associate

 

Year Ended 30 June 2020

 

 

 

Group

 

 

 

 

£

Cost

 

 

 

 

At 1 July 2019

 

 

 

14,274,706

Share of profit - 2020

 

 

 

125,294

Share of other comprehensive profit - 2020

 

 

 

262,707

Dividend received - 2020

 

 

 

(1,026,884)

Impairment of equity-accounted associate

 

 

 

(1,160,843)

At 30 June 2020

 

 

 

12,474,980

 

 

 

 

 

 

Year Ended 30 June 2019

 

 

 

Group

 

 

 

 

£

Cost

 

 

 

 

At 1 July 2018

 

 

 

22,090,708

Share of profit - 2019

 

 

 

3,753,685

Share of other comprehensive loss - 2019

 

 

 

915,673

Dividend received - 2019

 

 

 

(8,214,659)

Impairment of equity-accounted associate

 

 

 

(4,270,701)

At 30 June 2019

 

 

 

14,274,706

 

The Group's interest in the associate, SIS, a company incorporated in England and Wales, is held by Alternateport Limited. Alternateport Limited holds an investment of 20.54% in the equity share capital of SIS and is entitled to appoint a director and alternate director to the SIS board. This right has been exercised since acquisition. Alternateport Limited is a wholly owned subsidiary of Catalyst Media Holdings Limited, a wholly owned subsidiary of Catalyst Media Group plc.

 

The Directors have noted that subsequent to SIS's 31 March 2020 reporting date, it has recorded significant losses as a result of the restrictions imposed due to the Covid-19 pandemic. These losses have not been formally reported on, or audited, and the Directors note that it is not considered practicable for SIS to prepare financial statements to 30 June 2020 under IFRS.

 

The Directors have assessed that while the impact of Covid-19 is significant, given it relates to broader circumstances rather than discretely identifiable transactions, it is not appropriate to adjust for its share of SIS's losses for the period 1 April 2020 to 30 June 2020. These losses, together with the Group's share of SIS's results for its remaining financial period to 31 March 2021, will be reflected in the Group's financial statements for the year ended 30 June 2020.

 

A copy of the strategic forecasts prepared by SIS was made available to the Directors of CMG showing management forecasts of the income statement, statement of financial position and statements of cash flow. SIS's management have assumed a relatively low level of future profits at a steady level over a period of five years and applied a discount rate of 15% to arrive at a present value. In conjunction with these forecasts, the potential impact of the settlement of the ongoing TRP litigation has been considered. The losses made by SIS for the period 1 April 2020 to 30 June 2020 have also been included in the analysis.

 

After reviewing the forecasts and other factors detailed above, the Directors concluded that the carrying value of the investment in SIS should be reduced to £12.5 million. The value of the investment in SIS has therefore been impaired by £1.2 million to achieve this.

 

Share of profit of associate

 

 

2020

 

 

SIS Total

 

£'000

2020

 

CMG share

 

£'000

2019

 

CMG share

 

£'000

 

 

 

 

 

 

Revenue

 

 

212,593

43,667

49,584

 

 

 

 

 

 

Operating profit after individually significant items

 

 

 

3,618

 

743

 

1,517

 

 

 

 

 

 

Net interest receivable

 

 

755

155

126

Profit / (losses) on business wind down

 

 

 

(3,577)

 

(735)

 

2,606

Profit on disposal of joint venture

 

 

-

-

-

Profit on disposal of fixed asset

 

 

-

-

-

Profit before tax

 

 

796

163

4,249

Taxation

 

 

(186)

(38)

(496)

Share of profit after taxation

 

 

610

125

3,753

Net income from associate

 

 

610

125

3,753

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

Actuarial gain

 

 

1,968

404

1,443

Deferred tax

 

 

(689)

(141)

(500)

Change in value of hedging instrument

 

 

-

-

(27)

 

 

 

1,279

263

916

 

Share of net assets and liabilities of associate

 

 

 

 

 

Net assets

 

 

93,833

19,273

24,550

Net liabilities

 

 

(33,111)

(6,801)

(11,438)

Net equity

 

 

60,722

12,472

13,112

 

As at 30 June 2020, SIS was continuing to deal with tax and legal issues that arose from the 2010 Commonwealth Games (CWG) in Delhi, India. SIS, via a partnership of the name of SIS Live, delivered the host broadcast production and facilities contract for the 2010 CWG. Given continuing scrutiny of the entire CWG project immediately after the closure of the Games, approximately 40% of the contract has still not been paid. A provision of £5.9 million was made in respect of this non-payment in the SIS financial statements for the year ended 31 March 2011.

 

As at 30 June 2020, SIS continued to be involved in a litigation case brought by The Racing Partnership ("TRP") and others against SIS's subsidiary, Sports Information Services Limited ("SISL"), and others. SISL has successfully defended two of the three claims and, following the year end, both SISL and TRP have been granted permission by the judge to appeal elements of the judgement. SISL have been ordered by the judge to pay 20% of TRP's costs.

 

SIS Live received a draft assessment in March 2014 from Indian tax authorities in relation to the year ended March 2011. SIS has strongly rejected the draft assessment, and continues to appeal it through the Indian judiciary system. As appeal proceedings continue it is not possible to quantify the potential tax liability that may arise of the subsequent recoverability of that amount through the courts and therefore no further provision has been made in the accounts of SIS.

 

On 27 June 2020, SIS acquired 100% of the share capital of 49's Limited for a net consideration of £4.8m with a potential for further deferred consideration to follow contingent on company performance. While the acquisition of 49's Limited is a significant event arising after SIS's financial reporting date of 31 March 2020, the Directors have concluded that its impact on the Group's share of SIS's results to 30 June 2020 is immaterial and therefore does not require adjusting for.

 

3.  Post balance sheet events

 

There were no events subsequent to the Statement of Financial Position which require disclosure.

 

See note 2 for a description of the impact of the post balance sheet events as they relate to SIS's reporting date (31 March 2020) on the Group's valuation of the investment in associate as at 30 June 2020.

 

4.  Annual Report

 

The Annual Report for the year ended 30 June 2020 will be available today from the Company's website www.cmg-plc.com.

 

The Annual General Meeting will be held at 6 Stratton Street, London W1J 8LD, at 10.00 a.m. on 10 February 2021.

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