RNS Number:6997B
Base Group PLC
26 September 2002
Base Group plc
(formerly Digital Sport plc)
INTERIM RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2002
Base Group plc, the AIM listed sports management group, representing leading
football players and managers announces interim results for the six months ended
30 June 2002.
Financial highlights
* Turnover more than trebled to #428,000 (2001: #141,000)
* An operating loss before charges for goodwill amortisation of #288,000
(2001 #747,000)
* An operating loss after charges for goodwill amortisation of #1,314,000
(2001: #782,000)
Operational highlights
Major deals involving Base Group include:
* Terry Venables' appointment as manager of Leeds United FC
* Magnus Hedman's move to Celtic FC
* Gilberto Silva, member of the Brazilian World Cup team now playing in the
UK for Arsenal FC, signed as a client
* Paul Okon's transfer to Leeds United FC
* Vincent Vuoso's move from Independiente of Argentina to Manchester City FC
* Justice Christopher, the Nigerian World Cup player, joining Levski Sofia
Strategic highlights
* Agreement with leading Italian agency GEA World, headed by Alessandro
Moggi, to transfer players between Italy and the UK
* Agreement with Intermedia Centrale Sport, a Spanish agency to develop
business in Spain and South America
* Acquisition of Time Management Global Limited ("TMG"), a sports
representation Company. Clients include: Michael Ricketts, the Bolton
Wanderers and England striker; Brian Lara, West Indies cricketer and; Magnus
Hedman, Celtic and Swedish International goalkeeper
* Change of year-end from December to February to reflect the new FA
Premiership transfer window system
* Name change to Base Group plc.
Commenting on the results, Adrian Bradshaw, Chairman, said:
"Although overall activity levels in the transfer market during the summer were
lower than anticipated, we believe that our performance should be seen in the
light of our medium-term strategy. This involves making the necessary
investments in key personnel and infrastructure to build an organisation that
can successfully compete in the global sports management industry in the years
to come."
Base Group Plc Binns & Co PR Ltd
Paul McCaughey, Chief Operating Emma McCaffrey, Paul Vann, Sam Allen
Officer Tel: 020 7786 9600
Robin Aitken, Finance Director
www.base-group.com
Tel: 020 7580 0705
INTERIM RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2002
Chairman's Statement
I am pleased to present the results for Base Group plc for the six months to 30
June 2002. This period has seen the group make progress in developing its
business and in making the necessary investments in key personnel and
infrastructure required to build an organisation that we believe can compete
successfully in the global sports management industry in the years to come.
Results
The adoption of a more prudent accounting policy regarding the treatment of
goodwill arising on acquisitions has had a significant impact on these results.
It will however more accurately reflect the difficult market conditions
currently prevailing in the sector. In the accounts to 31 December 2001,
goodwill arising on the acquisition of Icon Management Solutions Limited ("Icon
") was being written off over 3 years. The directors have now decided that the
period over which goodwill should be written off on this acquisition should be
reduced to 2 years. In addition they have also taken the view that goodwill
arising on the acquisition of TMG should be written down to 50% of its estimated
total value as at 30 June 2002. These decisions have had a major impact on the
Group's results in the first half of the current year as can be seen below.
Turnover for the period more than trebled to #428,000 (2001: #141,000).
Operating expenses for the period excluding goodwill were #511,000 (2001:
#875,000) leading to the operating loss before charges for goodwill being
#288,000 (2001: #747,000). Taking into account the charges for goodwill
amortisation of #1,026,000 for the period (2001: #35,000) operating expenses
totalled #1,537,000 (2001: #910,000). The operating loss for the period was
#1,314,000 (2001: #782,000). No interim dividend is declared.
Developments
A number of important developments have taken place during the period under
review, which the Board expects will provide the foundations for its growth in
the years to come. These include:
* The recent signing of an exclusive agreement to work with the leading
Italian football agency, GEA World to transfer players between Italy and the UK.
GEA World is headed by Alessandro Moggi, the son of Luciano Moggi, General
Director of Juventus. GEA lists among their client moves this summer: Alessandro
Nesta (Lazio to AC Milan), Fabio Cannavaro (Parma to Inter Milan) and Marco Di
Vaio (Parma to Juventus).
* A joint venture agreement with the Spanish agency, Intermedia Centrale
Sport with whom we will work to develop our business in both Argentina and
Spain. Base already have management presence in Buenos Aires.
* The acquisition of Time Management Global Limited ("TMG"), sports
representation company in June. Clients include: Michael Ricketts, the Bolton
Wanderers and England striker; Brian Lara, West Indies cricketer; and, Magnus
Hedman, the Celtic and Swedish international goalkeeper.
* The signing, last week, of Gilberto Silva as a client. Silva is one of the
few players from the winning Brazilian World Cup team playing in the UK, having
joined Arsenal FC this summer.
* The change of name from Digital Sport plc to Base Group plc. The new name
and its associated branding provides a consistent image to our clients, contacts
in the football market and to our wider stakeholder community.
Trading Highlights
The collapse of ITV Digital in this country and Kirch in Germany have led to
difficulties in the football market with the value of football transfers this
summer significantly reduced compared with the levels seen in previous years.
However, the group has continued to benefit from transfer activity and has
assisted football clubs, players and managers with their contract negotiations.
Major deals involving Base Group include:
* Terry Venables joining as manager of Leeds United FC.
* Magnus Hedman moving to Celtic FC.
* Paul Okon's transfer to Leeds United FC.
* Vincent Vuoso moving from Independiente of Argentina to Manchester City FC.
* Justice Christopher, the Nigerian World Cup player, joining Levski Sofia.
Although overall activity levels in the transfer market during the summer were
lower than anticipated, we believe that our performance should be seen in the
light of our medium-term strategy. This involves making the necessary
investments in key personnel and infrastructure to build an organisation that
can successfully compete in the global sports management industry in the years
to come.
Change of year-end
The FA have introduced to the English Premiership, for the first time this year,
transfer windows during which all transfer activity of players must be
transacted. The first window closed on 31 August 2002 and the next window will
be open for the month of January 2003. Although it is not clear exactly what the
effect of this change will be on the transfer market, it will have a major
impact on the timing during the financial year of Base Group's and other
football agents' income. With this in mind the board has decided to change the
Group's financial year-end from 31 December to 28 February in order that it will
include the January transfer window. As a consequence, the Group's next full
year financial statements will cover the 14-month period to 28 February 2003.
Company Website
As part of the changes associated with the re-branding of the group, a new
Company website, www.base-group.com, has been launched today. As well as
providing information to our clients and business partners we hope that the
website will be a useful source of information for our investors.
Outlook and Current Trading
Market conditions are challenging and we do not anticipate any significant
improvement in the short-term. Base Group is not immune to these developments.
We remain dependent on the level of transfer activity and contract negotiation
regarding our existing clients. It is difficult to assess with any accuracy the
likely level of this activity in the remaining part of this financial year. We
consider however that, in line with our full year statement for 2001, we have
put in place an infrastructure and the personnel equipped to take advantage of
any increase in activity in the UK and European transfer markets.
The board would like to take this opportunity to thank all the staff of Base
Group for their hard work over the first part of this year. Their ongoing
enthusiasm and commitment to continually developing the quality of services
delivered to our clients is vital to the future success of the business.
Adrian Bradshaw 26 September 2002
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
6 months 6 months 12 months to
to 30/6/02 to 30/6/01 31/12/01 Audited
Unaudited Unaudited
#000 #000 #000
Turnover
Continuing operations 407 89 760
Acquisitions 21 - -
Discontinued operations - 52 52
428 141 812
Cost of sales (205) (13) (220)
Gross profit 223 128 592
Administrative expenses (511) (875) (1,553)
Goodwill amortisation (1,026) (35) (267)
Net operating expenses (1,537) (910) (1,820)
Operating (loss)/profit before exceptional (1,314) (645) (1,020)
items
Exceptional items - (137) (208)
Operating loss (1,314) (782) (1,228)
Profit on disposal of subsidiaries - - 6
Net interest receivable 35 84 134
Loss on ordinary activities before taxation (1,279) (698) (1,088)
Taxation - - -
Loss for the financial period (1,279) (698) (1,088)
Loss per ordinary share:
Basic (0.16)p (0.10)p (0.15)p
Diluted (0.15)p (0.10)p (0.14)p
Adjusted (0.03)p (0.08)p (0.08)p
Operating (loss)/profit before exceptional items can be analysed between
continuing and discontinued operations as follows:
6 months 6 months 12 months to
to 30/6/02 to 30/6/01 31/12/01 Audited
Unaudited Unaudited
#000 #000 #000
Continuing operations (714) (156) (531)
Acquisitions (600) - -
Discontinued operations - (489) (489)
(1,314) (645) (1,020)
CONSOLIDATED BALANCE SHEET
As at As at As at
30/6/02 30/6/01 31/12/01
Unaudited Unaudited Audited
#000 #000 #000
Fixed assets
Intangible assets 1,293 801 1,108
Tangible assets 44 4 3
1,337 805 1,111
Current assets
Debtors 444 174 260
Cash at bank and in hand 1,466 2,846 2,634
___ ___ _______
1,910 3,020 2,894
Creditors: amounts falling due within one year (691) (440) (570)
_______ _______
Net current assets 1,219 2,580 2,324
_______ _______
Total assets less current liabilities 2,556 3,385 3,435
_______ _______
Net assets 2,556 3,385 3,435
Capital and reserves
Called up share capital 7,975 7,675 7,675
Shares to be issued 640 - 540
Share premium account 3,011 3,011 3,011
Other reserves 3,330 3,430 3,330
Profit and loss account (12,400) (10,731) (11,121)
Equity shareholders' funds 2,556 3,385 3,435
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
As at As at As at
30/6/02 30/6/01 31/12/01
Unaudited Unaudited Audited
#000 #000 #000
Total recognised losses for the period (1,279) (698) (1,088)
Shares issued 300 731 959
Shares to be issued 100 - 212
(879) 33 83
Shareholders' funds at start of period 3,435 3,352 3,352
Shareholders' funds at end of period 2,556 3,385 3,435
CONSOLIDATED CASHFLOW STATEMENT
Note Six months ended Six months ended Year ended 31/
30/6/02 30/6/01 Unaudited 12/01
Unaudited #000 #000 Audited
#000
Net cash outflow from operating activities 1 (528) (1,157) (1,407)
Returns on investments and servicing of
finance:
Net interest received 35 84 134
Capital expenditure:
Payments for tangible fixed assets (33) (1) (1)
Receipt from the sale of tangible fixed - 1 1
assets
__________ __________ _________
(33) - -
__________ __________ _________
Acquisition and disposals:
Sale of subsidiary undertakings - - (12)
Acquisition of subsidiary undertakings, net (642) (129) (129)
of cash borrowings acquired
__________ __________ _________
(642) (129) (141)
__________ __________ _________
Financing:
Proceeds from issue of share capital (net
of expenses) - 11 11
__________ __________ _________
Decrease in cash (1,168) (1,191) (1,403)
========= ======== ========
NOTES TO THE INTERIM ACCOUNTS
1) Reconciliation of operating loss to net cash Six months ended Six months ended Year ended
flow from operating activities 30/6/02 30/6/01 31/12/01
Unaudited Unaudited Audited
#000 #000 #000
Operating loss (1,314) (782) (1,228)
Goodwill amortisation, depreciation and other 1,026 44 268
amounts written off fixed assets
Working capital movements:
Debtors (113) 7 (31)
Creditors (127) (426) (416)
________ ________ ________
Cash outflow from operating activities (528) (1,157) (1,407)
________ ________ ________
2) This interim report was neither audited nor reviewed by the auditors. It
does not constitute statutory accounts within the meaning of s240 of the
Companies Act 1985, but has been prepared using the accounting policies set out
in the Group's 2001 Statutory Accounts. The financial information for the year
ended 31 December 2001 was derived from the latest Group accounts which have
been filed with the Registrar of Companies and received an unqualified audit
report which did not contain statements under S237 (2) or (3).
3) The charges for amortisation of goodwill arising on Icon Management
Services Limited for the period to 30 June 2002 are #420,000 (2001 #35,000) and
for Time Management Global Limited ("TMG") are #606,000 (2001 #nil).
4) Loss per share were calculated on the group loss for the financial period
and on the weighted average number of ordinary shares in issue during the period
of 784,269,672 (30 June 2001: 729,492,372). The adjusted loss per share is
calculated before exceptional items and charges for goodwill amortisation.
5) On 8 June 2002 the company acquired TMG for initial consideration of
#260,000 in cash and the issue of 30 million new ordinary shares of 1p each in
Base Group plc, credited as fully paid. Further consideration will be paid to
the TMG vendors by way of cash and the issue of new ordinary shares in the
company dependent on TMG's turnover less third party commissions for the period
to 31 December 2003.
6) On 27 June 2002 the company changed its name from Digital Sport plc to
Base Group plc.
7) The charge to exceptional items for the period to 30 June 2001 relates to
a provision for costs relating to an aborted acquisition by the Company.
8) The Board approved these Interim Accounts on 26 September 2002.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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