R4E.L Regulatory News (R4E)

11 Jul 2006 07:15

First Artist Corporation Plc (AIM: FAN) Interim Results for the Six months ended 30 April 2006 11th July 2006First Artist Corporation PLC ("First Artist" or "the Group"), the acquisitivesports and entertainment group, today announces unaudited interim results forthe six months ended 30 April 2006.Highlights * Operating profit* up ‚£372,000 to ‚£126,000 * Retained profit up ‚£310,000 to ‚£26,000 * Turnover up 332% to ‚£4,513,000 (2005: ‚£1,045,000) * EPS before taxation, amortisation of goodwill and exceptional costs up 0.51p to 0.03p * Consolidated net assets up 338% to ‚£3,356,000 * Successful integration of last summer's Event Management & Wealth Management acquisitions which are performing well * On 11 July the Group announced 2 further acquisitions, within the Entertainment and Football Representation Divisions *Operating profit is stated before exceptional administrative expenses andgoodwill impairmentCommenting on the results, Jarvis Astaire, Chairman, said:"We are pleased that this half-year has underlined the success of our expansionstrategy to date. All divisions are trading in line with market expectationsand the Board remains optimistic about the Group's continued success for theremainder of the year and beyond.We will be continuing this strategy to strengthen our position in the UK andEurope by organic and acquisitive growth, integrating these with our strongcore businesses."For further information:First Artist Corporation plcJon Smith, Chief Executive +44 (0) 20 8900 1818Richard Hughes, Finance DirectorArbuthnot Securities Limited +44 (0) 20 7012 2000Tom Griffithsgth media relations +44 (0) 20 7153 8039 / 8035Toby HallJade MamarbachiNotes to EditorsFirst Artist Corporation PLC (AIM: FAN) is a leading sport and entertainmentrepresentation and event management group. With offices in London, Milan, theUSA and Middle East, it provides four distinct services: sports playerrepresentation, celebrity representation, wealth management, and eventmanagement. Its player representation division, First Artist Management isrecognised as one of world's leading football management groups.CHAIRMAN'S STATEMENTIt gives me great pleasure to introduce our results for the 6 months ended 30April 2006, which were ahead of our expectations, reporting an interim profitafter tax (‚£26,000) for the first time since floating on AIM. This period hassuccessfully demonstrated our diversification strategy and established FirstArtist as a truly integrated multi-functional Sport representation,Entertainment and Event management group. The figures for all our divisionsreflect the mutual benefits that we are gaining from this strategy.Our business has enjoyed a successful period across all areas, both financiallyand operationally, with last summer's acquisitions now fully integrated andpositively contributing to the performance of the group. Operating profit of ‚£126,000 for the period has set a new benchmark for the group, with the two newacquisitions, ABG Financial Management and The Finishing Touch, providing thebackbone to this result.The Group remains second half weighted, particularly due to the timing of thefootball summer trading window, although we continue to take strides todiversify into a broad based multi-functional plc with stable income streamsthroughout the year, which has begun to become evident through these figures.On 11 July the Group acquired the following businesses: * NCI Management Limited an established UK Entertainment Management company for a total maximum consideration payable of ‚£1.75 million. Initial consideration paid of ‚£650,000 cash and 500,000 shares. NCI gives critical mass to our own expanding organically grown entertainment division, introducing further TV/media personality clientele and the ability to produce and manage the content of our own programming. * ProActive Scandinavia A/S, a member of the Aim listed Formation Group plc, a leading Football Management company based in Copenhagen, Denmark for a total consideration paid of ‚£1.75 million cash and a further ‚£250,000 paid to Karsten Aabrink, Managing Director of the company. The company will be renamed First Artist Scandinavia A/S. This will strengthen our player base and strategically and geographically place the division within all the key European football regions, making First Artist the largest European football representation group. Our traditional businesses are performing in line with expectations and we arelooking to gain from this summer's World Cup and with the recent finalisationof the pan-European TV rights deal, the football market will continue toadvance over the coming years. We see significant consolidation within therepresentation industry and our position as the leading European agency groupwill only be strengthened by this development.In early June we announced the signing of an agreement between The CompleteLeisure Group plc, chaired by Lord Coe and our event management subsidiary, TheFinishing Touch (Corporate Events) Limited, focused on generating eventmanagement related revenues from a series of targeted events and preferredsupplier referrals.Group and financial reviewTURNOVERTurnover for the period has increased 332% compared to last year throughincreased activity in the entertainment business (up 42%) and through theinclusion of the turnover generated from the acquisitions of ABG FinancialManagement and The Finishing Touch.OPERATING PROFITThe operating profit for the Group, before goodwill amortisation and impairmentand one-off exceptional costs was ‚£126,000, an increase of ‚£372,000 for thecomparative period.A more detailed composition of the results by division can be seen in thebusiness reviews.GOODWILL AMORTISATION AND EXCEPTIONALSExceptional costs for the last 6 months resulted from the closure costsassociated with the FIMO Geneva office and First Artist international.Both of the above companies are in the process of being struck off.INTEREST PAYABLE, FUNDING AND LIQUIDITYAt 30 April 2006 the cash balance of the group was ‚£292,000, up ‚£473,000 fromthe corresponding period last year.Deferred consideration has been reclassified as provisions for liabilities andcharges. This balance is contingent on the performance of the acquiredbusinesses, ABG Financial Management Limited and The Finishing Touch (CorporateEvents) Limited and is subject to change.Deferred consideration is therefore not considered in net debt calculations andwill be financed entirely by the individual performance of each business.Net debt of ‚£1.48 million (2005: ‚£0.65 million) at the period end was comprisedof 6 months ended 6 months ended Year ended 30th April 2006 30th April 31st October 2005 2005 ‚£'millions ‚£'millions ‚£'millions Five year bank loan (1.41) - (1.55) Other group net debts (0.36) (0.48) (0.37) Cash in hand and bank overdrafts 0.29 (0.18) 1.27 Group net debt (1.48) (0.66) (0.65)TAXATIONThe tax charge of ‚£41,000 includes a 5% withholding tax charge of ‚£51,000 on adividend paid out by FIMO Sport Promotion AG to First Artist Corporation Plc,as part of the closure costs.EARNINGS PER SHAREEarnings per share before exceptional items and goodwill increased from a lossof 0.48p to a profit of 0.03p, and basic earnings per share also increased froma loss of 0.59p to a profit of 0.03p. This is directly due to the increasedprofitability of the enlarged group and the earnings enhancing means offinancing the acquisitions.SHAREHOLDERS' FUNDSShareholders funds increased from ‚£3.31 million to ‚£3.36 million over the last6 months, resulting in an increase in net assets per share of 0.1p to 3.8p.OUTLOOK AND ACQUISITIONSOur strategy of providing distinct but wholly complementary services: sportsplayer representation, entertainment and celebrity management, wealthmanagement and event management, is now a reality and we can look to pushforward as a business, both organically and by further acquisitions.As well as pursuing organic growth, via cross referrals within the Group andincreased sales activities, we are actively seeking, in addition to theacquisitions announced on 11 July, further acquisitions and joint ventures inall business areas.In particular within; * Strategic sports marketing and sponsorship as a complementary skill-set and to exploit our pre-eminent position as one of the leading representation businesses in Europe * Media companies within the entertainment sector to enable us to promote our representation and corporate clients * Event production businesses within sport, entertainment and fashion, to compliment our event management and entertainment division * Wealth management to increase our client base through joint ventures with other professional service companies We are pleased that this half-year has underlined the success of our expansionstrategy to date. All divisions are trading in line with market expectationsand the Board remains optimistic about the Group's continued success for theremainder of the year and beyond.We will be continuing this strategy to strengthen our position in the UK andEurope by organic and acquisitive growth, integrating these with our strongcore businessesJarvis AstaireChairman11th July 2006Consolidated Profit and Loss AccountFor the six months ended 30 April 2006 Notes Six months Six months Year ended to ended ended 31 October 30 April 30 April 2005 2006 2005 (Unaudited) (Audited) ‚£000's (Unaudited) ‚£000's ‚£000's Sales Continuing 4,478 1,034 4,385 Acquisitions - - 1,449 Discontinued 35 11 27 4,513 1,045 5,861 Cost of sales (2,039) (68) (1,325) Gross profit 2,474 977 4,536 Administrative expenses (2,348) (1,223) (3,482) Exceptional administrative 2 (5) (51) (161)expenses Operating profit/(loss) before goodwill Continuing 88 (268) 754 Acquisitions - - 290 Discontinued 33 (29) (151) 121 (297) 893 Administrative expenses - - - (43)goodwill impairment and amortisation Total operating profit/ 121 (297) 850(loss) Investment income 19 2 11 Interest payable (73) (17) (52) Profit/(loss) on ordinary 67 (312) 809activities before taxation Taxation 3 (41) 28 (299) Profit/(loss) on ordinary 26 (284) 510activities after taxation Dividends - - - Retained profit/(loss) 26 (284) 510for the period RETAINED EARNINGS / 4 0.03 p (0.59) p 0.89 p(LOSSES) PER SHARE Basic profit/(loss) per share Fully diluted profit/ 4 0.03 p (0.59) p 0.88 p(loss) per share Consolidated Balance SheetAs at 30 April 2006 Notes As at As at As at 30 April 30 April 31 October 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's FIXED ASSETS Intangible assets 5,952 50 5,295 Tangible assets 739 715 719 Investments 100 - - 6,791 765 6,014 CURRENT ASSETS Debtors 4,003 2,140 4,746 Cash at bank and in hand 691 197 1,527 4,694 2,337 6,273 CREDITORS: Amounts falling (3,705) (2,201) (5,055)due within one year NET CURRENT ASSETS 989 136 1,218 TOTAL ASSETS LESS CURRENT 7,780 901 7,232LIABILITIES CREDITORS: Amounts falling (1,172) (136) (1,303)due after more than one year PROVISIONS for liabilities 5 (3,252) - (2,623)and charges NET ASSETS 3,356 765 3,306 CAPITAL AND RESERVES Called up share capital 224 120 224 Capital redemption reserve 15 15 15 Share premium account 7,902 6,217 7,888 Profit and loss account (4,785) (5,587) (4,821) 10 3,356 765 3,306 Statement of Total Recognised Gains and LossesFor the Six months ended 30 April 2006 Six months Six months Year ended ended ended 31 October 30 April 30 April 2005 2006 2005 (Audited) (Unaudited) (Unaudited) ‚£000's ‚£000's ‚£000's Profit / (loss) for the financial 26 (284) 510period Currency translation differences 10 (28) (56)on net foreign currency investments Total recognised gains and losses 36 (312) 454Consolidated Cash Flow StatementFor the Six Months ended 30 April 2006 Notes Six months Six months Year ended ended ended 31 October 30 April 30 April 2005 2006 2005 (Audited) (Unaudited) (Unaudited) ‚£000's ‚£000's ‚£000's Cash (outflow) from 7 (340) (477) (12)operating activities Returns on investments and (54) (15) (35)servicing of finance Taxation (261) - (4) Capital expenditure and (42) 6 (3)financial investment Acquisitions and disposals 8 (129) (25) (2,126) Cash (outflow) / inflow (826) (511) (2,180)before financing FINANCING: Issue of share capital 14 - 2,001 Costs of issue of shares - - (361) Bank loans (131) - 1,545 Directors' loans - - 92 Other loans (28) 50 (135) Capital element of finance (5) (30) (47)lease rental payments (150) 20 3,095 (Decrease) / increase in (976) (491) 915cash in the period Cash used to (increase) / 164 (20) (1,412)decrease debt financing New finance leases (15) - - (827) (511) (497) Net debt at the beginning of 9 (648) (151) (151)the period Net debt at the end of the 9 (1,475) (662) (648)period Notes to the Interim Accounts:For the six months ended 30 April 20061. Basis of preparationThe financial information contained within this interim report does notconstitute statutory accounts within the meaning of Section 240 of theCompanies Act 1985. The interim financial information has been prepared on thebasis of the accounting policies set out in the Group's statutory accounts forthe year ended 31 October 2005.The figures for the six months ended 30 April 2006 and 30 April 2005 areunaudited. The figures for the year ended 31 October 2005 have been extractedfrom the statutory accounts which have been filed with the Registrar ofCompanies and did not contain a statement under Section 237 (2) or (3) of theCompanies Act 1985.2. Exceptional administrative expenses Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Costs of Abortive Acquisitions - 12 12 Restructuring costs and 5 39 149Redundancies 5 51 1613. Tax charge/(credit)The tax charge/(credit) is based on the estimated effective rate for the periodas a whole. Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's UK corporation tax charge 70 - 106 Adjustments in respect of prior - - -periods Foreign taxes adjustment 51 2 118 Current tax charge for the period 121 2 224 Deferred Taxation: (80) (30) 75 Origination and reversal of timing differences Tax charge on ordinary activities 41 (28) 2994. Earnings / (loss) per shareThe calculations of earnings / (loss) per share are based on the followingprofits and numbers of shares. Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) Number Number Number Weighted average number of 0.25 pence ordinary shares in issue during the period For basic earnings per share 89,523,729 47,906,523 57,034,181 Exercise of share options 2,268,829 3,481,347 1,005,773 For diluted earnings per share 91,792,557 51,387,870 58,039,954 ‚£'000s ‚£'000s ‚£'000s Earnings /(loss) for the financial 26 (284) 510period 5. Provisions for liabilities and chargesThe provisions for liabilities and charges relate to deferred consideration. Inearlier periods this was disclosed as part of creditors.Deferred consideration represents the estimated amounts payable, although thefinal amounts payable are dependent upon the results of the acquiredbusinesses. Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Deferred consideration due within 1,231 - 1,118one year Deferred consideration due after 2,021 - 1,505one year Total deferred consideration 3,252 - 2,6236. FRS7The Company has considered the implications of FRS7. Due to the second halfweighting of the group it has not been able to accurately determine thestandard's effect on these accounts and believes them not to be material. Theeffects of the standard will be fully reflected in the Annual statutoryaccounts for the year to 31st October 2006.7. Reconciliation of operating profit to net operating cash flow Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Operating profit / (loss) 121 (297) 850 Depreciation 40 29 65 Impairment and amortisation of - - 43goodwill Loss on disposal of fixed assets (2) 4 5 Decrease in debtors 743 133 (1,608) (Decrease) in creditors (1,252) (318) 689 Exchange 10 (28) (56) Net cash outflow from operating (340) (477) (12)activities 8. Acquisitions and disposals on cash flow Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Consideration on acquisition of (107) (25) (2,126)subsidiary undertakings and other investments Payment of deferred consideration (22) - - Net cash outflow (129) (25) (2,126)9. Analysis of changes in net debt At 1 Cash flow Non-Cash At 30 April November changes 2006 2005 ‚£'000s ‚£'000s ‚£'000s ‚£'000s Cash at bank and in hand 1,527 (836) - 691 Bank overdrafts (259) (140) - (399) 1,268 (976) - 292 Finance Leases (24) 5 (15) (34) Debt due within one year (607) 22 - (585) Debt due after more than (1,285) 137 - (1,148)one year (1,916) 164 (22) (1,767) Total (648) (812) (15) (1,475)10. Reconciliation of movement in shareholders' funds Six months Six months Year ended ended ended 31 October 30 April 30 April 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Profit / (loss) for the financial 26 (284) 510period Shares issued to acquire - - 135subsidiary undertakings Shares issued 14 - 2,001 Issue costs - - (361) Foreign exchange adjustment 10 (28) (56) Increase/(decrease) in 50 (312) 2,229shareholders' funds Opening shareholders' funds 3,306 1,077 1,077 Closing shareholders' funds 3,356 765 3,306Shareholders' funds are entirely attributable to equity interests.11. Interim ReportCopies of this interim report are being sent to all shareholders and areavailable to the public at the Company's registered office, First Artist House,87 Wembley Hill Road, Wembley, Middlesex HA9 8BU.FIRST ARTIST CORPORATION PLC