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From: Nigel
ArtDate: 16 August 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.234.173
Date: 19/08/06
Time: 11:31
16th August 2006
Parallel Media Group Interim & Final Results and Proposed Changes
News Item - Conduit PR
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2006
Chairman's statement
The Company's interim results for the period ended 30 June 2006 show a retained profit of £9,000 compared to a loss of £218,000 reported in last year's interim results. This period also saw the Company, together with its 49.9% associate, Parallel Media Asia (2003) Ltd ('PMA'), successfully stage PGA European Tour events in Malaysia, Singapore, Indonesia and China.
Financial review
The turnover for the period was £1,477,000 compared to a turnover of £1,923,000 in the prior period. The reason for this decrease is that in March 2005 the Company staged the Samsung Ladies Masters, whereas this year's event is scheduled to take place in the second half of 2006 in Singapore. Gross profit earned on this turnover increased to £850,000 from £602,000 last year. This reflected increased activity in Europe. The operating profit for the period was £178,000 (6 months ended 30 June 2005: loss of £110,000). The share of loss/profit in associates line (loss of £52,000 compared with profit of £19,000 in 2005) is the Group's 49.9% share of the loss of PMA for the period. Interest payable of £123,000 relates to interest payable on convertible and shareholders loans and the bank loan with Bumiputra Commerce Bank.
Board changes
On a personal basis, I would like to take this opportunity to thank our two new Board members, Edward Adams and Leonard Fine, who have contributed immensely to the turnaround we are beginning to experience even before they formally joined the Board. The Board intends to strengthen the board further and is looking to announce the appointments of a COO from outside the Company and two new Non Executives in the Autumn.
Future Prospects
As has been separately announced, the Company has reached an amicable agreement to dissolve its current business activities operated through the Company's associated company Parallel Media Asia (2003) Limited with the result that it will be taking over responsibility for the office in Hong Kong and the promotion of the UBS Hong Kong Open and TCL Classic.
The events with which PMG will be involved in the second half of the year will include the UBS Hong Kong Open, the Samsung Ladies Masters, the Kazakhstan Open and FIFPro Football Awards. Sponsorship sales so far for the second half of 2006 are already ahead of the same period last year, and I remain confident that the Company will continue its growth during the second half of 2006. In addition, future Sponsorship revenues for 2007 are already showing good visibility.
Finally, one of the consequences of the dissolution of the Company's activities operated through its Asian associate will be the Company's future freedom to act on its own account in Asia and the Company expects to announce shortly several exciting new opportunities which can drive the progress of the Group's business further.
David Ciclitira Chairman & CEO
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005
Chairman's statement
This year has been a time of challenges for Parallel Media Group Plc (`PMG') but has also witnessed a turnaround in its fortunes with the successful conclusion of four new Title Sponsorships in its Asian business during the 2006 PGA European Tour international's season.
Since year end the company has agreed heads of terms for restructuring of its Asian operations on a basis which the directors believe is beneficial to PMG. In addition PMG is in negotiation to raise funds of at least £2 million which will be used to redeem certain of the Company's issued convertible loan stocks.
A circular describing more of these matters will be sent to shareholders shortly and approval of the resolutions necessary to issue shares for these purposes will be sought at an Extraordinary General Meeting.
Key assets
PMG's business internationally is also set to expand, especially in Europe. PMG sees great potential in the FIFPro XI Awards, and its existing property in Kazakhstan. Another area of activity that PMG has embarked on in 2006, is its involvement in European Golf Resorts Limited. As previously announced, your company is involved in negotiations for one venue in Havr (Croatia). PMG is currently also reviewing its contract with the PGA de las Americas regarding the Tour de las Americas with the aim of making this contract potentially profitable in 2007.
It is your board's belief that the aforementioned developments which have been achieved between the year end and today, significantly enhance your Company's long term prospects.
Corporate
The Company has also decided to restructure the Board to put the Company in the best position for this coming period of growth. I will continue to spend a considerable portion of my time overseas developing the international aspects of the business and will continue for the foreseeable future as chairman. I am delighted to announce that Edward Adams who is chairman of RAM Investment Group plc which is a significant holder of convertible loan stock in the company has agreed to become a Non-Executive Director of the Company and that Leonard Fine has also agreed to become a Non Executive Director again. Both Edward and Leonard have worked closely with me over recent months and I have greatly valued their input so it is a pleasure to welcome them as directors. We will also be looking to further strengthen the board over the forthcoming months
The board has decided that it would be appropriate for the business to have a chief operating officer who would run the company on a day-to-day basis, relieving me of these duties and enabling me to apply my skills more fully to event creation and sponsorship arrangement which will be the revenue generators for the company in coming years. We have identified a suitable candidate with considerable experience in this field to take this role and are optimistic of completing an agreement with him in the near future.
Outlook
The last year has been a very significant period in the development of your company. The current year has started well and I anticipate being able to announce results for the first half of 2006 very shortly and that these will demonstrate the improvement in trading. The changes with regard to our Asian activities should enable this trend to be continued further and the planned improvements to the Group's balance sheet should enable the business to be developed further and profitably.
Without doubt this Company would not be in the position it is today without the tremendous support of its staff and shareholders and I thank them for their effort and dedication.
David Ciclitira. Chairman 14 August 2006
Financial report
Overview to 31 December 2005
In this year the Group shows a retained loss of £1.05 million compared to a prior year loss of £2.57 million. The adjusted loss per share figure for the year was 4.71p, against a prior year adjusted loss per share figure of 10.98p.
Turnover
Group turnover for the year was £2.58 million compared to turnover of £2.98 million in the prior year. Turnover reduced due to the cessation of the Group's Italian operations and the expiration of a television rights contract, both of these activities had been loss making in 2004. These reductions in turnover were partially offset by the staging of two new Ladies European Tour golf events in Asia and an increase in the commission generated from the Group's associated company Parallel Media Asia (2003) Ltd.
Operating Loss
After deducting rights fees and other direct costs from the Group's gross revenues a gross profit of £1.0 million was generated in the year. The operating loss equalled £0.31 million which is an improvement of £1.13 million on the £1.44 million recorded in the previous year. A major reason for this improvement is the reduction in the administration costs incurred by the group, especially in terms of staff and professional advisor costs.
Exceptional Items
During the year the Company disposed of an associated company, Broadcast Innovations Limited, this transaction resulted in a profit on sale of £0.16 million. The Company also disposed of a subsidiary company, Parallel Media Italia SRL ('PMI'), the consideration for this disposal was the transfer to the Company of certain sponsorship rights that PMI held. In calculating the loss on disposal no value was attached to this consideration leading to an accounting loss on disposal of £0.16 million.
Net liabilities
The net liabilities of the Group at the year end are £5.22 million, this position will be dramatically improved upon conversion of convertible loans owed by the Group and through the fund raising which the Group proposes to undertake.
Interest and Taxation
The Group paid net interest of £0.36 million arising from convertible loan interest, interest on the facility with Bumiputra Commerce Bank and other loans.
There was no corporation tax charge during the year.
Loss Per Share
Adjusted loss per share in the year was 4.71p compared to 10.98p in the year ended 31 December 2004. The adjusted loss as shown in Note 1 to the accounts is based upon the attributable profit of the continuing operations after adjusting for goodwill and all exceptional items. At the end of this year, the Company made no final dividend recommendation.
PROPOSED CHANGES TO BUSINESS ARRANGEMENTS IN ASIA AND RELATED MATTERS
Parallel Media Group plc (the 'Company' or 'PMG') has today made a number of announcements and expects the Company's shares to be re-admitted to trading on AIM today. In summary, these announcements detail.
Proposals for the dissolution of the Company's arrangements for the current business activities operated through the company's associated company Parallel Media Asia (2003) Ltd ('PMA') which promotes five Asian golf tournaments. This would result in: PMG becoming the sole promoter of the UBS Hong Kong Open and the TCL Classic golf tournaments PMG would cease to be interested in PMA and the three other Asian golf tournaments all inter company balances due from PMA settled
PMG is seeking to raise approximately £3.5 million to repay these and other loans and to provide further working capital An extraordinary general meeting has been convened for 7 September 2006 to approve the resolution necessary to implement a fundraising. A further announcement will be made before that meeting giving final details of the proposals. Two new non-executive directors, Leonard Fine and Edward Adams, were appointed yesterday The Company has today released its final results for 2005 and its interim results for the first half of 2006 The Chairman's statement accompanying the interim results refers to continuing trading progress in the second half of 2006, good visibility of income for 2007 and the prospect of announcing new opportunities to grow PMG's core business shortly Commenting on the announcements, David Ciclitira, Chairman of PMG said:
'The last few years have been very tough, but I believe that the results announced show that we are now moving forward strongly. The dissolution of our Asian joint venture, the fund raising and other matters would leave us well placed to drive the business forward profitably from a solid balance sheet.'
For further information contact:
David Ciclitira Chairman Parallel Media Group plc 020 7225 2000
Abigail Singleton Conduit PR 0207 429 6606
Summary of the proposals
On 14 June 2006 Parallel Media Group plc ('PMG' or the 'Company') entered into binding heads of agreement with the other shareholders and financiers (the 'Malaysian Shareholders') of its associate company, Parallel Media Asia (2003) Limited ('PMA') for a dissolution ('the 'Dissolution') of the arrangements for the business activities operated through PMA and its wholly owned subsidiary (together the 'PMA Group'). This business promotes, through PMA's subsidiary, Parallel Media Golf (Asia) Limited, five PGA European Tour events held in Asia.
A key condition of the heads of agreement involved PMG raising significant additional funding by no later than 8 September 2006. As at today's date, these funds have not been raised in full, although progress continues to be made and the board is hopeful that the deadline will be met. It was also subject, inter alia, to regulatory approval. A total of approximately £3.5m is being sought in connection with the Dissolution and to provide the Company with additional working capital.
In anticipation that the fundraising can be successfully completed, the Company needs to obtain shareholder approval to increase the authority to allot shares for cash. A circular has been sent to shareholders seeking their approval and an extraordinary general meeting has been convened for 7 September 2006 to approve the resolution necessary to implement a fundraising. A further announcement will be made before that meeting giving final details of the proposals.
Since 2003, PMG's interests in its PGA European Tour golf tournaments held in Asia have been owned by an associated company, established with certain of the Malaysian Shareholders, in which PMG holds a minority interest. It has become clear to the Board over recent months that the original intentions of the establishment of this arrangement were not being achieved and, in particular, the expansion of PMG's golfing interests in Asia and the cash flow PMG was receiving from the existing interests were not satisfactory.
The Board also established that this arrangement was not achieving the objectives of our partners. Accordingly, negotiations were entered into with a view to dissolving the partnership and sharing the events managed by the PMA Group between the two groups. Notwithstanding the Dissolution, it is likely that the two groups will work together in the future on specific projects.
The principal terms of the Dissolution are that: 1. PMG would assume the rights to promote the UBS Hong Kong Open and the TCL Classic golf tournaments, and 2. that the Malaysian Shareholders would acquire PMG's 49.975% shareholding in the issued share capital of PMA. In addition, normal trading and intercompany balances will be settled between PMG and PMA. All shareholder agreements between PMG, the Malaysian Shareholders and PMA would also be terminated at completion.
For further information contact:
David Ciclitira Chairman Parallel Media Group plc 020 7225 2000
Abigail Singleton Conduit PR 0207 429 6606
Edward Portman Conduit PR Ltd 76 Cannon St EC4N 6AE Office: +44 (0) 20 7429 6666 Direct: +44 (0) 20 7429 6607 Fax: +44 (0) 20 7429 6699 Mob: +44 (0) 773 3363 501
www.conduitpr.com
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