RNS Number:2610I
First Artist Corporation PLC
07 February 2005
7 February 2005
First Artist Corporation Plc
('First Artist' or 'the Company')
Final results for the year ended 31 October 2004
First Artist is a leading European management and representation company looking
after the commercial interests of footballers and other high profile media
personalities in the football and television market.
Highlights of Results for the Year ended 31 October 2004
* Sales of #3.98 million in the year ended 31 October 2004 compared to #4.23
million for the sixteen months ended 31 October 2003.
* Sales up 29% from #3.08 million for the twelve months to October 2003.
* Operating profit of #0.04 million before goodwill amortisation and
impairment and one-off exceptional costs for the twelve month period is an
upturn compared to the loss of #2.54 million for the sixteen months ended
October 2003 and also up from the loss of #1.66 million for the
corresponding twelve month period ended October 2003
* The operating loss of #0.45 million is stated after #0.09 million of
goodwill impairment and #0.39 million of exceptional charges arising from
the Group's restructuring, aborted acquisition costs and the strategic
review, undertaken in January 2004. The restructuring costs include the
costs of closure relating to the First Artist Snooker Academy and the FIMO
Geneva offices.
* At 31 October 2004 the net cash balance of the Group was #310,000, up from a
net cash balance of #19,000 as at 31 October 2003.
* There was a net #0.26 million operating cash inflow this was after the
deducting #0.39 million of one-off restructuring costs.
* Continued expansion of the Company's commercial and media division which now
represents over 30 well known sports and media personalities.
* The Group is working with other leading European agency operations, senior
European clubs and leagues to enhance the position, reputation and
transparency of the football transfer market and in particular the role of
the Football Agent. The Group wishes to establish a professional body
alongside the industry, clarify trading terms and practice.
* Acquisition of Mel Stein's Team Sports Management Limited and merger of this
operation into our London office.
For further information please contact:
First Artist Corporation PLC 020 8900 1818
Jon Smith, Chief Executive
Richard Hughes, Finance Director
Shore Capital 020 7408 4090
Alex Borrelli
Chairman's Statement
In my interim report for the six months to 30 April 2004, I stated that
following a profitable January we forecast an upturn in the 2004 summer trading
window and an improvement in the contribution from the European markets. We are
pleased to announce that this confidence has been well placed and the Group has
returned to trading profitability before exceptional administrative expenses and
goodwill amortisation for the year to 31 October 2004.
The continuing Group made a profit before exceptional costs of #57,000 (2003:
Loss #2,019,000), a significant turnaround from the previous period, underlining
the positive steps taken by the Board to restructure the business cost base in
2003.
Comparing this year to the same 12-month period to October 2003, Sales increased
29%, Gross profit 16% and overheads have reduced by 32%
As previously reported we closed the First Artist Snooker Academy in May and are
also closing the FIMO Geneva office. We continue to maintain strong management
controls of cash and costs with direct expenditure focussed on strengthening and
developing the core business.
The Group as a whole made an operating loss before interest and tax and goodwill
impairment of #355,000 (2003: Loss #3,020,000), which is after accounting for
non-recurring exceptional costs of #391,000 mainly related to restructuring and
closure costs.
OUTLOOK AND CURRENT OPERATIONS:
First Artist is one of Europe's leading football management groups and continues
to improve and expand both in the UK and across Europe with increased activity
and some notable transfers being undertaken during the summer trading window.
We are continuing to develop our presence in the Far East and US with minimal
drain on the Group's central resources.
In January 2005, the Company acquired the staff, player contracts and business
assets of Mel Stein's Team Sports Management Limited and merged this operation
into our London office. This acquisition will strengthen the London operation
both with operational and player resource.
The UK's commercial and media department is continuing its organic growth and
now represents over 30 well known sports and media personalities on a full
management basis. The department is expanding to include personalities outside
sport and a lead role in the West End was recently secured for one of our new
clients. The launch of our Corporate Division in September 2004 is proving
successful and activity is increasing as different markets are targeted and
reached. The commercial department has recently completed negotiations to
exclusively market a new product to sporting arenas worldwide and is working to
promote several major events at leading sporting venues. All aspects of this
division give us confidence of increased activity here over the coming year.
Our business diversification strategy continues to be a priority and the Group
is actively seeking suitable acquisition opportunities, which can utilise our
core-skills into non-football related sectors. Should suitable opportunities,
as with Team Sports Management, present themselves in the football market then
the Group will pursue these too.
The Group is working with other leading European agency operations, senior
European clubs and leagues to enhance the position, reputation and transparency
of the football transfer market and in particular the role of the Football
Agent. The Group wishes to establish a professional body alongside the industry
to clarify trading terms and practice.
We previously reported that the Board would be seeking approval from its
shareholders and confirmation by the High Court to restructure its balance sheet
to remove the deficit on the profit and loss account by cancellation of the
share premium account. In light of the cost involved in undertaking such an
exercise the Board has decided to reinvest this expenditure into the development
of the Group with the intention to revisit the option at a more appropriate
time.
I would like to thank all those involved in the restructuring of this group and
thank the Board for its continued commitment in turning around a group in what
remains a difficult environment.
Alex Johnston
Chairman
7 February 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 OCTOBER 2004
Continuing Discontinued
Operations Operations Total Period from 1
Year ended Year ended Year ended July 2002 to
31 October 31 October 31 October 31 October
2004 2004 2004 2003
#000 #000 #000 #000
TURNOVER 3,739 236 3,975 4,229
Cost of sales (1,114) (29) (1,143) (1,147)
GROSS PROFIT 2,625 207 2,832 3,082
Administrative expenses (2,568) (228) (2,796) (5,622)
Profit/(loss) before exceptional 57 (21) 36 (2,540)
administrative expenses
Exceptional administrative expenses (113) (278) (391) (480)
OPERATING LOSS before goodwill amortisation (56) (299) (355) (3,020)
Administrative expenses - goodwill impairment - (92) (92) (11,820)
and amortisation
GROUP OPERATING LOSS (56) (391) (447) (14,840)
Share of operating loss of associates - - - (97)
TOTAL OPERATING LOSS (56) (391) (447) (14,937)
Loss on disposal of investment - (26)
(447) (14,963)
Investment income 8 11
Interest payable (54) (54)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (493) (15,006)
Taxation 167 414
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (326) (14,592)
Dividends - -
RETAINED LOSS FOR THE YEAR (326) (14,592)
LOSS PER SHARE
Basic loss per share (0.63) (27.08)
pence pence
Fully diluted loss per share (0.62) (27.08)
pence pence
Basic earnings/(loss) per share before 0.30 (4.21)
goodwill amortisation and exceptional costs pence pence
Fully diluted earnings/(loss) per share 0.30 (4.21)
before goodwill amortisation and exceptional pence pence
costs
CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2004
2004 2003
#000 #000
FIXED ASSETS
Intangible assets - -
Tangible assets 755 811
755 811
CURRENT ASSETS
Debtors 2,243 3,504
Cash at bank and in hand 310 156
2,553 3,660
CREDITORS: Amounts falling due within one year (2,133) (2,908)
NET CURRENT ASSETS 420 752
TOTAL ASSETS LESS CURRENT LIABILITIES 1,175 1,563
CREDITORS: Amounts falling due after more than one year (98) (87)
NET ASSETS 1,077 1,476
CAPITAL AND RESERVES
Called up share capital 120 135
Capital redemption Reserve 15 -
Share premium account 6,217 6,217
Profit and loss account (5,275) (4,876)
EQUITY SHAREHOLDERS' FUNDS 1,077 1,476
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2004
Year ended Period from 1 July
31 October 2002 to 31 October
2004 2003
#000 #000
Cash inflow/(outflow) from operating activities 313 (623)
Returns on investments and servicing of finance (46) (43)
Taxation 87 (97)
Capital expenditure and financial investment 22 43
Acquisitions and investments (92) (141)
CASH INFLOW/(OUTFLOW) BEFORE FINANCING 284 (861)
Financing 7 (600)
INCREASE/(DECREASE) IN CASH IN THE PERIOD 291 (1,461)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Year ended Period from 1 July
31 October 2002 to 31 October
2004 2003
#000 #000
Increase/(decrease) in cash in the period 291 (1,461)
Cash from increase in debt financing (7) 600
New finance leases (32) (104)
Deferred consideration on acquisition of subsidiaries - 1,627
252 662
NET DEBT AT 1 NOVEMBER 2003 (403) (1,065)
NET DEBT AT 31 OCTOBER 2004 (151) (403)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 OCTOBER 2004
Year ended Period from 1 July
31 October 2002 to 31 October
2004 2003
#000 #000
Loss for the financial period (326) (14,592)
Currency translation differences on net foreign currency investments (73) 59
Total recognised gains and losses relating to the period (399) (14,533)
NOTES
1. BASIS OF PREPARATION
The financial information contained in this report does not constitute statutory
accounts within the meaning of Section 240 of the Companies act 1985.
The financial information for the period ended 31 October 2003 contained in this
report has been extracted from the audited accounts of the Company for which the
auditors have given an unqualified report.
2. GOING CONCERN
In view of the Group's losses, the Directors have been closely monitoring the
financial situation and the restructuring of the business during the current and
previous period has led to a subsequent return to profitability (before
exceptional items and goodwill). The Directors continue to closely monitor and
control the Group's financial situation and through diversification seek new
ways in which to reduce reliance on traditional deal based revenue and to review
opportunities in sports other than football.
The Directors have considered in detail the trading and cash flow forecasts for
the next twelve months. Whilst the Directors cannot predict the future trading
and funding requirements of the Group with certainty, they consider that the
above actions and the continued support of the Company's bankers will provide
sufficient finance to enable the Group to meet its liabilities as they fall due.
Therefore it is appropriate for the financial statements to be prepared on a
going concern basis. The financial statements do not include any adjustment
that might result from the Directors' forecasts not being met.
3. TAXATION Year Period
2004 2003
#000 #000
Current tax:
UK corporation tax (credit)/charge on (losses)/profits of the period - (66)
Foreign taxes (91) (294)
Adjustments in respect of previous periods (56) 8
Current tax (credit)/charge for the period (147) (352)
Deferred taxation:
Origination and reversal of timing differences (20) (62)
Tax (credit)/charge on profit on ordinary activities (167) (414)
4. EARNINGS PER SHARE
Basic loss per share has been calculated on a loss on ordinary activities after
taxation of #326,000 (2003: loss of #14,952,000) and on a weighted average of
51,784,044 (2003: 53,893,666) ordinary shares in issue during the year.
Fully diluted loss per share is based on a loss of #324,000 (2003: #14,592,000)
and on a weighted average of 52,409,427 (2003: 53,893,666) potential shares in
issue.
In addition, the Directors have included earnings per share calculations based
on earnings before the amortisation of goodwill and before exceptional costs as
they believe that these figures provide a more meaningful and useful indication
of the Group's performance during the period.
The basic earnings/(loss) per share before amortisation of goodwill and
exceptional costs has been calculated on a profit on ordinary activities after
taxation of #157,000 (2002: loss of #2,266,000) and on a weighted average of
51,784,044 (2003: 53,893,666) ordinary shares in issue during the year.
The fully diluted earnings/(loss) per share before amortisation of goodwill and
exceptional costs is based on a profit of #159,000 (2003: loss of #2,266,000)
and on a weighted average of 52,409,427 (2003: 53,893,666) potential shares in
issue.
5. RESERVES AND RECONCILIATION OF MOVEMENT
IN SHAREHOLDERS' FUNDS
Capital Total
Share redemption Share Profit and shareholders'
capital Reserve premium loss account Funds
#000 #000 #000 #000 #000
GROUP
1 November 2003 135 - 6,217 (4,876) 1,476
Loss for the financial period - - - (326) (326)
Purchase of own shares (15) 15 - - -
Exchange adjustments - - - (73) (73)
31 October 2004 120 15 6,217 (5,275) 1,077
Capital Total
Share redemption Share Profit and shareholders'
capital Reserve premium loss account Funds
#000 #000 #000 #000 #000
COMPANY
1 November 2003 135 - 6,217 (4,619) 1,733
Loss for the financial period - - - (530) (530)
Purchase of own shares (15) 15 - - -
31 October 2004 120 15 6,217 (5,149) 1,203
6. CASH FLOWS Year Period
2004 2003
#000 #000
Reconciliation of operating loss to net cash inflow/(outflow) from
operating activities
Operating loss (447) (14,937)
Depreciation 67 166
Amortisation of goodwill 92 11,820
Loss on disposals of fixed assets (1) 41
Share of operating loss of associates - 97
Decrease in debtors 1,208 2,232
Decrease in creditors (533) (101)
Exchange (73) 59
Net cash inflow/(outflow) from operating activities 313 (623)
7. ANNUAL REPORT
Copies of the Annual Report and Financial Statements will be circulated to
Shareholders shortly and may be obtained after the posting date from the Company
Secretary, First Artist Corporation plc, First Artist House, 87 Wembley Hill
Road, Middlesex, HA9 8BU, or from the Companies Website www.firstartist.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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