Hi Fools,
Chrysalis Group PLC have issued their annual results.
Here is the official announcement released via RNS.
23 November 2000
CHRYSALIS GROUP PLC
PRELIMINARY RESULTS TO 31ST AUGUST 2000
Chrysalis Group Plc today announces preliminary results for the year to
31st August 2000.
Financial Highlights
* Turnover up 25% to £168.2m (1999: £134.5m)
* Radio revenue up 35% to £37.2m, with operating profits at £5.0m (1999: £
0.7m)
* EBITDA more than trebled in the year to £7.7m (1999: £2.4m)
* Operating profits of £2.6m compared to losses of £4.6m in 1999
* Group profit before tax of £1.0m compared with loss of £5.9m in 1999
* Main operating divisions - Music, Television, Radio, Media Products -
all now in profit
* Results include £3.0m start-up costs in New Media
* Net assets increased to £36.9m (1999: £10.4m)
* EPS of 0.47p (1999: Loss 3.95p)
Operational Highlights
* Chrysalis Radio turnover grew at more than twice the industry rate (35%
v 15.5%)
* Chrysalis Radio is now fourth largest UK radio group with 4.7 million
listeners and a 7.8% share of commercial radio listening
* Over 80% of listening from 15-44 age demographic
* MXR consortium formed to apply for regional digital licences
* Music publishing increased NPS by more than 16% to £7.2m
* 14% turnover growth and return to profit in Visual Entertainment as
measures to improve margins introduced
* Profits in Media Products more than doubled to £4.0m (1999: £1.8m) with
Books now accounting for 40% of turnover
* £26.8m raised from shareholders in January to accelerate New Media
strategy
* 4 new investments made covering radio, music, sport and local
information
Current Trading
* First quarter radio revenues up 47% on last year and ahead of budget
* Other divisions trading in line with expectations following good start
to the year
* Chrysalis Music No 1 independent publisher for Q3 2000 with 16.6% market
share
* Rivals.net one of the 'stickiest' sites in Europe with average time
spent in October of over 33 minutes and 18 million monthly page
impressions
Management
* Richard Huntingford to become Group Chief Executive from 1st December,
2000
Commenting on the results, Chris Wright, Chairman, said,
'These results show that the businesses we have invested in over the last few
years are capable of delivering strong returns for shareholders. We have put
in place the structures and targets to ensure that management is continually
focussed on delivering above industry-average growth and return on investment.
This, and our strong management team, will ensure that Chrysalis plays a
leading role in any further consolidation within our industries.'
Richard Huntingford, Group Managing Director, said,
'I am delighted to report excellent progress across our businesses during the
year with all the divisions that we have been building over the past five
years - Radio, Music, Visual Entertainment and Media Products - now in profit.
At the same time, we have made great strides in implementing our new media
strategy which will ensure that Chrysalis is well-placed to secure enhanced
value for shareholders in the digital age. With the buoyant start to the
current year, particularly for our radio division, I am confident that we will
deliver a strong performance in the coming year.'
Enquiries:
Chrysalis Group Plc
Richard Huntingford, Group Managing Director 020 7470 1057 or 080 2793 444
Lisa Gordon, CEO Chrysalis New Media 020 7465 6272
Buchanan Communications
Mark Edwards & Bobbie Swanson 020 7466 5000
Analysts Meeting: 10.00am Thursday 23rd November, 2000
Press Meeting: 11.30am Thursday 23rd November, 2000
Both at: Buchanan Communications, 107 Cheapside, London,
EC2V 6DN
Introduction
I am delighted to report excellent progress across our businesses during the
year with all the divisions that we have been building over the past five
years - Radio, Music, Visual Entertainment and Media Products - now in profit.
At the same time, we have made great strides in implementing our new media
strategy to ensure that Chrysalis is well placed to secure enhanced value for
shareholders in the digital age.
Financial Review
The results for the year to 31st August 2000 show a profit before tax of £1.0
million, compared with a loss of £5.9 million in 1999. Turnover for the year
rose by 25% to £168 million. EBITDA more than trebled in the year to £7.7
million (1999: £2.4 million) reflecting the positive operating cash flow that
is now being generated from the group's investment in recent years. Operating
profits were £2.6 million, a £7.2 million turnaround from the previous year's
operating loss of £4.6 million. The current year reflects £3.0 million of
start-up costs for our New Media businesses so, prior to this, our core
divisions achieved an approximate £10 million upturn in operating profits to £
5.3 million. Earnings per share amounted to 0.47p (1999: loss 3.95p) and a
dividend of 0.55p per share is proposed (1999: 0.55p, restated for the 5 for 1
share split earlier in the year). Net assets increased to £36.9 million (1999:
£10.4 million), following the share placing in January 2000, which raised £
26.8 million.
Radio
The Radio Division moved strongly into profit as the audience growth of the
past few years was converted into outstanding revenue growth by the Chrysalis
Radio sales forces. Turnover rose by 35% to £37.2m (1999: £27.5m), compared
with industry growth of 15.5% in the same period, resulting in an operating
profit of £5.0m in 2000 (1999: £0.7m).
This last financial year has seen Chrysalis firmly consolidate its position
amongst the leading UK radio groups. Since winning its first licence in 1994,
Chrysalis Radio has grown to become the fourth largest radio group in the
country, through its quasi-national portfolio of seven major market stations
operating under the Heart and Galaxy brands.
The seven Chrysalis stations cover almost 25 million adults, equivalent to 51%
of the UK population. According to the latest independent audience figures,
the stations now attract 4.7 million listeners each week giving Chrysalis
Radio a 7.8% share of commercial radio listening. Significantly, over 80% of
listening comes from the all-important 15-44 age demographic. Overall the
division has attracted over 750,000 new listeners in the last twelve months,
representing 19.1% growth year on year.
Heart
Revenue growth across the Heart stations in the year was 22%. Our London
station, Heart 106.2, celebrated its fifth anniversary in September 2000 and
is now firmly established as the second most popular commercial station in the
highly competitive London market with almost 1.6 million listeners, equivalent
to a 15% reach, and a market share of 4.3%. Our oldest station, 100.7 Heart FM
in the Midlands, delivered another record performance in its sixth year. The
station has been number one in its market for the last two years and delivered
its best ever audience figures this year with a weekly reach of 26% and market
share of 11.8%, making it the UK's largest commercial station outside London.
Galaxy
The Galaxy network now comprises five stations, which in total attract 2.4
million weekly listeners focussed in the 15-34 demographic, making it one of
the biggest youth brands in the UK. The strength of the Galaxy brand and its
appeal to advertisers was endorsed by an impressive 64% growth in revenue
during the year, with 33% growth on a like-for-like basis.
Over the last twelve months the network has increased its audience by 45%,
fuelled by growth across all of the existing stations and the spectacular
performance of the newly launched Galaxy 105-106, which went on air in June
1999. The station celebrated the end of its first year with a 22% weekly reach
and a market share of 11%, making it the largest regional station in the North
East.
Our success at increasing audiences at our acquired stations continued with
our first acquisition, Galaxy 101 (Bristol/South Wales), recording record
weekly reach figures of 20%, with a market share of 6%, in the most recently
published research. The Galaxy 102 (Manchester) and 105 (Yorkshire) stations,
acquired in August 1997, delivered further strong audience growth across the
year of 25% and 14% respectively, with weekly reach figures currently of 16%
and 19% respectively. Galaxy 102.2 (Birmingham), now in its second year under
Chrysalis ownership, has further grown its audiences in the year to achieve a
weekly reach of 12% and 4.0% market share.
Chrysalis Radio Online
Chrysalis Radio Online was launched at the start of the financial year with a
clear strategy aimed at complementing and enhancing the online listeners radio
experience through the extension of each brand from pure radio to lifestyle.
This can offer significant added value to advertisers, allowing Chrysalis to
maximise the revenue potential of its brands.
The online sites incorporate all the existing Chrysalis stations and the first
year's traffic figures indicate a healthy demand for the service. Particular
success was achieved with Heart 106.2's 'Housemates from Hell' promotion which
drove considerable traffic to the site during its month-long run.
Digital radio and other expansion
The digital licences covering our regional analogue markets are now being
advertised by the Radio Authority and Chrysalis has submitted its first two
applications through MXR, a consortium it has formed with, amongst others,
Capital Radio, Guardian Media Group and Jazz FM. Chrysalis's shareholding in
MXR is 39.1%. Significantly, MXR has also attracted Ford as a shareholder and,
as part of the MXR consortium, Ford intends to fit digital radios as original
equipment in all Ford new cars sold in the UK from 2004. Chrysalis Radio is
budgeting to spend no more than £1 million in the current financial year in
its move into digital radio.
During the year Heart 106.2 was launched on the Sky national digital platform
and we also secured carriage for the station on the second London Digital
multiplex, providing us with an automatic renewal of our analogue licence
through to 2010. We will also apply for the third London Multiplex with the
objective of bringing the Galaxy format to the London market. That licence is
expected to be awarded during the first half of calendar 2001.
The Radio Authority is also advertising further regional analogue licences. We
intend to apply for the East Midlands with a Galaxy format, and also plan to
apply for the Yorkshire regional licence, where we hope to replicate the
success of Heart and Galaxy with a new format, featuring adult rock, called
'The Arrow'. This station will be aimed at the 40 plus demographic, an
audience which is currently least well served by commercial radio offerings.
It is anticipated that the forthcoming Communications White Paper will propose
a relaxation to the current radio ownership restrictions, leading to further
consolidation within the industry. This will, however, require primary
legislation that is unlikely to be enacted until 2002. We have considerable
headroom under the current ownership rules and therefore have an excellent
window of opportunity to further expand our radio portfolio through new
licence awards or acquisition. At the same time, we have set clear operating
performance targets for our existing radio businesses to ensure that we are
strongly placed to play a proactive role in future industry consolidation.
Outlook for advertising
Chrysalis Radio has benefited particularly from its ability to offer
advertisers a quasi-national sell through its branded network of major market
stations, with the Heart and Galaxy formats delivering a high concentration of
listeners from the sought after 15-44 age demographic. All of the recent
industry growth has been driven by national advertisers and Chrysalis has been
able to significantly increase its share of national revenue as a consequence.
Chrysalis Radio's split between national and local advertisers now stands at
around 80:20 across its seven stations. Double-digit industry growth is
forecast for 2001 and the further organic audience growth that we are
targeting from our less developed stations should ensure that Chrysalis
continues to outperform the industry in the medium term.
Music
The Music Division moved convincingly into profit through increased
profitability within publishing, coupled with sharply reduced losses at the
Echo Label. Turnover was up 21% to £35.0m (1999 £28.8m) with operating profits
of £0.7m compared to a loss of £1.0m the previous year. Increased publishing
activity across all the companies pushed the Group's NPS (net publishers
share) to a record level of £7.2m (1999 £6.2m), a 16% increase on the previous
year, significantly enhancing the underlying value of the Chrysalis Music
catalogue which now totals over 50,000 copyrights. At the same time, overall
investment in new writers and copyrights during the year increased by 35%.
The UK publishing company had another buoyant year with Top 10 album chart
successes from David Gray ('White Ladder'), Leftfield ('Rhythm & Stealth'),
Morcheeba ('Fragments of Freedom') and Moloko ('Things to Make and Do'). The
company's recent confirmation as No 1 independent publisher for Q3 2000 with a
16.6% independent market share reflects the continuing success of the group's
roster, both from UK and overseas signings.
Synchronisation income continued to be an important, lucrative market for the
company with Chrysalis-owned copyrights featuring in many film and television
commercials. These ranged from long-established copyrights such as David
Bowie's 'Changes' (licensed to Novell) through to copyrights from cutting-edge
contemporary artists such as Propellerheads and Aphex Twin. New media and
digital distribution platforms offer significant opportunities for our
catalogue to be further exploited in the future.
In the US, Chrysalis Music Inc moved into profit, with strong growth in
synchronisation and performance income, which included its biggest ever
synchronisation fee for one of our oldest copyrights 'My Way'. In Europe,
particular success was enjoyed by our Scandinavian writers, Anders Bagge and
Paul Rein, with international hits for Ronan Keating, Christina Aguilera and
98 Degrees amongst others.
The Echo Label reported sharply reduced losses in the year after doubling its
turnover. Considerable success was enjoyed by one of its first signings,
Moloko, who had two top selling singles during the year, 'Sing It Back' and
'The Time is Now'. Their album, 'Things to Make and Do', stayed in the Top 30
album chart for 23 weeks, becoming Echo's first ever platinum selling album,
and has now sold more than 600,000 units worldwide.
Visual Entertainment
The Visual Entertainment division had a better year in 2000, with turnover up
14% to £57.6 million(1999:£50.3million), leading to operting profits of £0.5m
compared to a loss of £2.5m the previous year. Margins are, however, still
below industry average and stronger controls have been introduced to remedy
this. Following a major strategic review, the Group is in the process of
restructuring the division into three 'centres of excellence' majoring on the
division's key strengths in the areas of drama, light entertainment and sport/
factual entertainment. This focused approach is designed to improve the
financial performance of the division and increase the number of commissions
from both existing broadcasters and the emerging digital terrestrial,
satellite and cable channels.
Continued success came from our drama division, with 'Midsomer Murders'
delivering strong audience ratings for ITV who have now commissioned a fifth
series. Following this, we will own 23 two-hour films of the drama series and
the show continues to sell well internationally, with Series IV and V now sold
to A&E network in the U.S.A. New drama commissions in the year included 'A
Many Splintered Thing', starring Alan Davies, for the BBC.
Chrysalis Sport consolidated its leading position in the sports television
production market with returning series of the award-winning 'F1' coverage
(ITV), 'Football Italia' (C4) and 'NBA 2000' (C4). New commissions include
'Speedway' (Channel 4), 'World Rally Championship' (International
distribution) and 'Vinnie Jones: Unauthorised'(Channel 4). The factual
entertainment are, Chrysalis tv, enjoyed a number of new commissions including
further series of top Ten (Channel 4).
In Entertainment, new commissions include 'Black Books' for Channel 4, who
have already commissioned a second series, and a pilot episode of 'Sam's
Game', starring Davina McAall in her first sitcom, which ITV has recently
ordered as a six part series. New episodes of more established programmes were
also secured, including 'Clarkson' (BBC).
The past year saw the Visual Entertainment disvision continue to pursue
expansion opportunites in Europe, expanding into Spain with the joint venture
between CVI Media group and trimagen S.A. CVI's Amsterdam-based productoin
company, ID+Dtv, inreased its programme sales by 53%, reinforcing its position
as the second largest supplier in the Netehrlands.
Future outlook
The Visual Entertainment division has been successful in its top line growth
but the primary focus in the short term is to drive the net margin of the UK
business up from the current levels of around 3% to closer to 5% and, over the
longer term, towards our target of 10%. We believe this will be achieved
through a combination of stricter financial controls and the introduction of
centralised control of programme development.
Media Products
The past year has seen the Media Products Division build on the foundations
established in the prior financial year when the Division was expanded beyond
Lasgo to include book publishing and distribution.
As a result the Division has seen turnover increase by 47% to £34.0 million
(1999: £23.1 million), with operating profits more than doubling to £4.0
million (1999: £1.8 million).
The diversification from the audio products export business in the last few
years has both sustained gross margins and protected the Division against a
background of downward margin pressure in the worldwide record business. We
have quickly established a significant presence in the book industry and are
already delivering healthy returns on the modest level of investment made,
through our ability to identify and turn around underperforming assets.
Overall, books business now accounts for approximately 40% of the Division's
turnover.
The past year has been one of exceptional growth, in which we have succeeded
in rapidly building a book publishing group of real worth. In doing so we have
also significantly increased our library of images and artwork, which we will
in due course digitise, enabling us to exploit additional revenue streams.
Chrysalis New Media
In addition to strong performances from our 'old media' businesses, the group
has made excellent progress in the implementation of its new media strategy.
Our strategy is to leverage our existing 'old media' assets and skillsets,
whether in content packaging, rights acquisition or marketing, for profitable
gain through investing in new media businesses that play to these strengths.
The shareholder fund-raising in January 2000, which raised £26.8 million, has
enabled us to accelerate our new media development such that we now have a
portfolio of investments that both match the strategic criteria and cover the
important areas of radio, music, sport and local information which we believe
will be the key drivers of internet useage in the future.
In December 1999, the Group realised its first new media investment through
the sale of Taxi Interactive to Affinity Internet Holdings, for consideration
payable in Affinity shares with a 12 month sale restriction. Since then, in
addition to continued support for Chrysalis Radio Online, four new investments
have been carefully selected to date. The Group's share of start-up and
pre-launch costs for the year, and related overhead, amounted to £3.0 million.
Investments to date
The four new investments are as follows:
Equity Planned
Investment
Commitment
Puremix (www.puremix.com) 65% £4m
Multi-channel internet radio site with 30 continuous music
streams, personalised to individuals' music tastes
Citipages (www.citipages.co.uk) 30% £4m
Local information portal, including web design and hosting
services for SMEs
Darkerthanblue (www.darkerthanblue.com) 35% £3m
Black music and urban culture website
Rivals (www.rivals.net) 90.1% £10m
Network of unofficial sports team websites
Puremix was launched on 31st October, 2000 and initial response to the site
has been very encouraging. Citipages, who will be an important local content
partner for Chrysalis Radio Online, is currently planning its initial rollout
which will be prioritised around the major Chrysalis Radio cities beginning
with Birmingham in January, 2001. Darkerthanblue has already achieved
significant on-line brand recognition as the definitive 'home of black music'
and is now working with other Chrysalis companies to harness radio,
television, merchandise and sponsorship opportunities to build the brand
across all media.
Chrysalis's initial investment in Rivals.net gave it a 25% equity stake, with
the remaining shares held by the US parent company, Rivals.com. The New Media
fund allowed Chrysalis to take control of Rivals.net and following the deal
announced on 15th September 2000, Chrysalis now owns 90.1% of the Company with
an option to acquire the remaining 9.9% stake at a fixed price of US $1.9
million by 31 December 2000.
Significant progress has been achieved in the three months since Rivals.net's
launch, with the site already achieving an average of 18 million monthly Page
Impressions, propelling it straight into the top 5 European online sports
properties. In October the average time spent on the site was over 33 minutes,
making it one of the 'stickiest' sports site in Europe. These traffic figures
demonstrate the huge, long-term potential of Rivals.net.
The future
During the next six to twelve monthsall these companies will be moving out of
the launch phase into revenue generation. We have put in place rigorous
financial review procedures for all our investee companies, including the
requirement to update their three-year business plans each quarter. This will
enable us to quickly adjust cost bases to match any changes to revenue
assumptions. The performance of our New Media division will be highlighted in
our financial reporting so that shareholders can separately identify the
progress against targets of both our existing and new media businesses.
Current year outlook
The current year has started strongly, particularly for our radio division
where revenues for the first quarter are running some 47% ahead of last year.
We believe that our organic audience growth, together with the strong appeal
of our Heart and Galaxy brands to national advertisers, will allow us to
continue to enjoy above industry-average revenue growth. Our Music, Visual
Entertainment and Media Products divisions have also enjoyed a good start to
the year which gives us confidence that we will deliver a strong performance
in the current year. To date our New Media businesses are also trading in line
with expectations, although only very modest levels of revenue were budgeted
for the first half of the year.
As a consequence, we are confident that we can continue to make further
progress towards our goals of delivering both strong profits growth from our
traditional businesses and enhanced shareholder value from our new media
initiatives.
Management
Following the successful conclusion of Richard Huntingford's first full year
as Group Managing Director, the Board has decided that Richard's position
should change to Chief Executive of the Chrysalis Group to more fully reflect
his role.
Richard joined the senior management team and the Board of Chrysalis in 1987,
as Corporate Development Director. He became Chief Executive of the Radio
Division in 1994 and built that division from an initial investment of £6m in
Metro Radio to one of today's leading UK commercial radio groups. In May 1999
he was appointed Group Managing Director and we have seen the market
capitalisation of the Group double since that date.
Over the past eighteen months Richard and I have continued to build on our
earlier relationship and the Group's results have demonstrated the success of
that relationship and the strength of our overall management team. We are not
intending to make any significant change to our mode of operation, but, in
recognition of Richard's contribution to our ongoing success, I am delighted
to announce that Richard's new position will take effect as from 1st December
2000.
I shall continue to work with Richard, the Board and the rest of the Executive
team as Executive Chairman to ensure continued growth for the Group
Dividend
It is proposed that, in accordance with the Board's policy of maintaining a
regular dividend to shareholders, a dividend of 0.55 pence per share (1999:
0.55 pence, adjusted for share split) be paid on 10th April 2001 to
shareholders on the register at the close of business on 16th March 2001.
Chris Wright 23 November, 2000
Chairman
CHRYSALIS GROUP PLC/Preliminary Results
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2000
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year Year
ended ended
Continuing Operations Discontinued 31st 31st
August August
Ongoing Acquisitions Total Operations 2000 1999
Note £'000 £'000 £'000 £'000 £'000 £'000
Turnover: Group and 167,277 938 168,215 - 168,215 134,500
share of joint ventures
Less: share of joint (5,434) - (5,434) - (5,434) (6,990)
ventures
Group turnover 2 161,843 938 162,781 - 162,781 127,510
Operating costs before (154,139) (923) (155,062) (155,062) (125,128)
depreciation and
amortisation
EBITDA 3 7,704 15 7,719 - 7,719 2,382
Depreciation of (3,126) (4) (3,130) - (3,130) (2,884)
tangible fixed assets
Net amortisation 4 (862) 361 (501) - (501) (1,106)
of intangible
assets and
acquired goodwill
Exceptional accelerated - - - - 0 (3,000)
amortisation of
intangible asset
Group operating 5 3,716 372 4,088 - 4,088 (4,608)
profit/(loss)
Share of operating (120) - (120) - (120) 178
profits/(losses) of
joint ventures
Share of operating - (1,119) (1,119) (228) (1,347) (205)
losses of associated
undertakings
Total operating profit/ 3,596 (747) 2,849 (228) 2,621 (4,635)
(loss)
Exceptional loss 6 (296) (296) -
on disposal of
fixed asset
investment
Profit/(loss) before 3,596 (747) 2,849 (524) 2,325 (4,635)
interest
Interest receivable and similar income 637 905
Interest payable and similar charges (2,006) (2,205)
Profit/(loss) on 2 956 (5,935)
ordinary
activities before
taxation
Taxation 7 (161) (566)
Profit/(loss) on ordinary activities after taxation 795 (6,501)
Minority interests (equity interests) (25) 268
Profit/(loss) for the financial year 770 (6,233)
Dividends (961) (889)
Retained loss for the financial year (191) (7,122)
Basic and diluted 8 0.47p (3.95)p
earnings/(loss)
per share
Dividend per share 0.55p 0.55p
CHRYSALIS GROUP PLC/Preliminary Results
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2000
CONSOLIDATED BALANCE SHEET
As at As at
31st 31st
August August
2000 1999
Note £'000 £'000
Fixed assets
Intangible assets 19,373 20,724
Tangible assets 20,687 20,009
Investments
Investment in joint venture companies
Share of gross assets 7,406 5,901
Share of gross liabilities (3,369) (1,951)
4,037 3,950
Investment in associated undertakings 6,679 1,229
Trade investments 51 122
10,767 5,301
50,827 46,034
Current assets
Stock and work in progress 6,434 6,976
Debtors 9 49,937 43,383
Investments 2,562 2
Cash at bank and in hand 10 8,813 17,359
67,746 67,720
Creditors: amounts falling due within one year (66,793) (88,590)
Net current assets/(liabilities) 953 (20,870)
Total assets less current liabilities 51,780 25,164
Creditors: amounts falling due after more than one year (11,811) (10,870)
Provisions for liabilities and charges (3,039) (3,937)
Net assets 36,930 10,357
Capital and reserves
Called up share capital 3,344 3,184
Share premium account 11 61,457 34,713
Other reserves 11 7,031 7,031
Profit and loss account 11 (39,521) (38,123)
Shareholders' funds (equity interests) 32,311 6,805
Minority interests (equity interests) 4,619 3,552
36,930 10,357
CHRYSALIS GROUP PLC/Preliminary Results
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2000
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Consolidated statement of total recognised gains and losses
2000 1999
£'000 £'000
Profit/(loss) for the 770 (6,233)
financial year
Foreign exchange gains and (365) 77
losses
Total recognised gains/(losses) in the year 405 (6,156)
Reconciliation of movements in shareholders' funds
2000 1999
£'000 £'000
Profit/(loss) for the 770 (6,233)
financial year
Dividends (961) (889)
Retained loss for the (191) (7,122)
year
Foreign exchange gains/ (365) 77
(losses)
New share capital subscribed 160 57
Share premium on shares issued during the year 26,744 3,068
Goodwill written off during the year (1,150) (2,162)
Goodwill on disposal of fixed asset investment 308 -
Net addition to/(reduction in) shareholders' funds 25,506 (6,082)
arising in the year
Shareholders' funds at beginning of 6,805 12,887
year
Shareholders' funds at end of 32,311 6,805
year
CHRYSALIS GROUP PLC/Preliminary Results
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2000
CONSOLIDATED CASH FLOW STATEMENT
Note 2000 1999
£'000 £'000
CASH INFLOW FROM OPERATING ACTIVITIES 12 808 2,371
Dividends received from joint venture companies 91 94
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 701 957
Interest (1,574) (1,860)
paid
Interest element of finance lease (158) (108)
payments
Dividends paid to minority interests - (231)
(1,031) (1,242)
TAXATION (671) (1,075)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Payments to acquire intangible fixed assets (47) (1,360)
Payments to acquire tangible fixed (4,135) (4,416)
assets
Receipts from sales of tangible and intangible fixed 364 296
assets
Payments to acquire trade investments - (70)
Payments to acquire current asset investments (1,000) -
Loans to joint venture 44 (320)
companies
(4,774) (5,870)
ACQUISITIONS AND DISPOSALS
Purchases of subsidiary undertakings (53) (11,870)
Net cash/(overdrafts) acquired with subsidiary - (817)
undertakings
Payments in respect of prior year acquisitions (2,995) (6,152)
Receipt in respect of reduction in consideration of 1,112 -
prior year acquisitions
Purchases of associated undertakings (6,646) (687)
(8,582) (19,526)
EQUITY DIVIDENDS PAID (917) (874)
CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND (15,076) (26,122)
FINANCING
MANAGEMENT OF LIQUID RESOURCES
Sale of short term - 261
investments
- 261
FINANCING
Issue of ordinary share 26,904 439
capital
New finance lease borrowings (net of repayments) 253 451
27,157 890
INCREASE/(DECREASE) IN CASH IN THE YEAR 12 12,081 (24,971)
CHRYSALIS GROUP PLC/Preliminary Results
PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31 AUGUST 2000
NOTES TO THE FINANCIAL INFORMATION
1 The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31st August 1999 or 2000. The
financial information for the year ended 31st August 1999 is derived from
the statutory accounts for 1999 which have been delivered to the
Registrar of Companies. The auditors have reported on the 1999 accounts;
their report was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985. The statutory accounts
for the year ended 31 August 2000 will be finalised on the basis of the
financial information presented by the Directors in this preliminary
announcement and will be delivered to the Registrar of Companies
following the company's annual general meeting.
2 Segmental analysis
Profit/(loss) before Third Party Turnover
taxation
Year Year ended Year ended Year ended
ended
31st 31st August 31st August 31st
August August
2000 1999 2000 1999
£'000 £'000 £'000 £'000
Music 712 (1,005) 35,018 28,772
Radio 4,966 669 37,202 27,507
Visual Entertainment 480 (2,533) 57,557 50,315
Media Products 4,023 1,786 33,999 23,101
Other (466) (325) 4,424 4,684
Corporate (4,386) (3,169) 15 121
5,329 (4,577) 168,215 134,500
New Media (3,004) (58) - -
2,325 (4,635) 168,215 134,500
Net interest (1,369) (1,300) - -
Less:joint venture - - (5,434) (6,990)
companies
956 (5,935) 162,781 127,510
3 EBITDA
EBITDA comprises earnings before interest, taxation, depreciation and
amortisation.
4 Net amortisation of intangible assets and Year ended Year ended
acquired goodwill
31st August 31st
August
2000 1999
£'000 £'000
Amortisation of positive goodwill arising on (729) (345)
acquisitions
Amortisation of negative goodwill arising on 759 -
acquisitions
Amortisation of other intangibles (531) (761)
(501) (1,106)
In accordance with FRS 10 - Goodwill and Intangible Assets, acquired
goodwill and intangible assets are capitalised and amortised over a
period of a maximum of 20 years, with the exception of investments in
music publishing catalogues which are amortised over a period of up to 50
years. Negative goodwill is credited to the profit and loss account over
the period which the related acquired assets are realised in cash.
5 Group operating profit/ Continuing Operations 2000 1999
(loss)
Ongoing Acquisitions Total Total
£'000 £'000 £'000 £'000
Group turnover 161,843 938 162,781 127,510
Cost of sales (100,358) (557) (100,915) (82,674)
Gross 61,485 381 61,866 44,836
profit
Net operating expenses
Distribution and (18,516) (16) (18,532) (11,295)
marketing costs
Administrative expenses (39,253) 7 (39,246) (38,149)
Group operating profit/ 3,716 372 4,088 (4,608)
(loss)
6 Exceptional loss on disposal of fixed asset investment
The exceptional loss on disposal of fixed asset investment relates to the
group's shareholding in Sheffield Sharks Limited which is now in
liquidation following the disposal of the business and assets.
7 Taxation
The taxation charge for the year comprises overseas taxation together
with a credit in respect of an overprovision in a prior year. There is no
UK tax charge for the year because the of availability of tax losses.
8 Basic and diluted earnings/(loss) per share 2000 1999
Profit/(loss) after taxation and minority
interests £770,000 £6,233,000)
Weighted average number of shares in issue 163,776,613 157,801,110
Basic and diluted earnings/(loss) per share 0.47p (3.95)p
The loss per share figures and the weighted average number of shares in
issue for the year ended 31 August 1999 have been adjusted to reflect the
5 for 1 share split which took place on 17th April 2000.
9 Debtors
Debtors include amounts totalling £0.9 million (1999: £1.4 million) which
are due after more than one year.
10 Cash at bank and inhand
Cash at bank and in hand includes a total of £3.3 million (1999: £8.6
million) of ringfenced funds under the terms of the shareholder agreement
in respect of the group's investment in CVI Media Group BV. This cash is
for the exclusive use of CVI Media Group BV and may not be used for any
other group purpose.
Cash balances do not include £17.9 million of funds which have been used
to offset overdrafts and short term borrowings.
11 Reserves
Share Other Profit &
Premium Reserves Loss Total
£'000 £'000 £'000 £'000
As at 1 September 1999 34,713 7,031 (38,123) 3,621
Shares issued 26,744 26,744
Retained loss for the (191) (191)
year
Goodwill written off during the year (1,150) (1,150)
Goodwill reinstated on disposal of fixed asset 308 308
investment
Foreign exchange losses (365) (365)
As at 31 August 2000 61,457 7,031 (39,521) 28,967
Goodwill written off to reserves is in respect of additional
consideration on an acquisition completed before the group adopted FRS 10
- Goodwill and intangible assets. The cumulative amount of goodwill
written off to reserves in accordance with Statement of Standard
Accounting Practice No.22 - Accounting for Goodwill - amounted to £56.7
million at 31 August 2000 (31 August 1999: £55.9 million).
12 Notes to the consolidated cash flow statement
(i) Reconciliation of operating profit/(loss) to Year ended Year ended
operating cash flows 31st August 31st
August
2000 1999
£'000 £'000
Operating profit/(loss) 4,088 (4,608)
Depreciation and amortisation charges 3,631 6,990
Loss/(profit) on sale of fixed assets 98 (57)
Provisions (utilised)/established (247) 788
Decrease/(increase) in stocks 1,141 (2,044)
Increase in (4,590) (4,544)
debtors
(Decrease)/increase in creditors (3,313) 5,846
Net cash inflow from operating activities 808 2,371
(ii) Reconciliation of net cash flow to movement in net borrowings
Year ended Year ended
31st August 31st
August
2000 1999
£'000 £'000
Increase/(decrease) in cash in the year 12,081 (24,971)
Cash inflow from net new lease borrowings (253) (451)
Cash inflow from decrease in liquid resources - (262)
Increase/(decrease) in net funds resulting from 11,828 (25,684)
cash flows
Translation differences (417) (43)
Increase/(decrease) in net funds in the year 11,411 (25,727)
Net (borrowings)/funds brought forward (18,349) 7,378
Net borrowings carried forward (6,938) (18,349)
(iii) Analysis of net funds/ At 1st Cash Flow Exchange At 31st
(borrowings) September movement August
1999 2000
£'000 £'000 £'000 £'000
Cash at bank and in 17,359 (8,129) (417) 8,813
hand
Bank Overdrafts (33,609) 20,210 (13,399)
Term Bank Loan (900) (900)
(17,150) 12,081 (417) (5,486)
Finance Leases (1,201) (253) (1,454)
Current asset 2 2
investments
Total (18,349) 11,828 (417) (6,938)
13 Post balance sheet events
On 15th September 2000, the group announced that it had agreed terms to
increase its shareholding in Rivals.net Limited, to 90.1% of the ordinary
share capital, by acquiring a 65.1% stake from Rivals.com Inc. In
consideration for the acquisition, the group agreed to pay US$2 million
in cash together with the repayment of US$0.5 million in debts owed by
Rivals.net Limited to Rivals.com Inc. As part of the agreement, the group
also acquired an option to call Rivals.com Inc's remaining 9.9% interest
in Rivals.net Limited for a fixed price of US$1.9 million by 31 December
2000.
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