First Artist Corporation Plc (AIM: FAN)
Interim Results for the Six months ended 30 April 2006
11th July 2006
First Artist Corporation PLC ("First Artist" or "the Group"), the acquisitive
sports and entertainment group, today announces unaudited interim results for
the 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 and
goodwill impairment
Commenting on the results, Jarvis Astaire, Chairman, said:
"We are pleased that this half-year has underlined the success of our expansion
strategy to date. All divisions are trading in line with market expectations
and the Board remains optimistic about the Group's continued success for the
remainder of the year and beyond.
We will be continuing this strategy to strengthen our position in the UK and
Europe by organic and acquisitive growth, integrating these with our strong
core businesses."
For further information:
First Artist Corporation plc
Jon Smith, Chief Executive +44 (0) 20 8900 1818
Richard Hughes, Finance Director
Arbuthnot Securities Limited +44 (0) 20 7012 2000
Tom Griffiths
gth media relations +44 (0) 20 7153 8039 / 8035
Toby Hall
Jade Mamarbachi
Notes to Editors
First Artist Corporation PLC (AIM: FAN) is a leading sport and entertainment
representation and event management group. With offices in London, Milan, the
USA and Middle East, it provides four distinct services: sports player
representation, celebrity representation, wealth management, and event
management. Its player representation division, First Artist Management is
recognised as one of world's leading football management groups.
CHAIRMAN'S STATEMENT
It gives me great pleasure to introduce our results for the 6 months ended 30
April 2006, which were ahead of our expectations, reporting an interim profit
after tax (�26,000) for the first time since floating on AIM. This period has
successfully demonstrated our diversification strategy and established First
Artist as a truly integrated multi-functional Sport representation,
Entertainment and Event management group. The figures for all our divisions
reflect the mutual benefits that we are gaining from this strategy.
Our business has enjoyed a successful period across all areas, both financially
and operationally, with last summer's acquisitions now fully integrated and
positively 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 new
acquisitions, ABG Financial Management and The Finishing Touch, providing the
backbone to this result.
The Group remains second half weighted, particularly due to the timing of the
football summer trading window, although we continue to take strides to
diversify into a broad based multi-functional plc with stable income streams
throughout 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 are
looking to gain from this summer's World Cup and with the recent finalisation
of the pan-European TV rights deal, the football market will continue to
advance over the coming years. We see significant consolidation within the
representation industry and our position as the leading European agency group
will only be strengthened by this development.
In early June we announced the signing of an agreement between The Complete
Leisure Group plc, chaired by Lord Coe and our event management subsidiary, The
Finishing Touch (Corporate Events) Limited, focused on generating event
management related revenues from a series of targeted events and preferred
supplier referrals.
Group and financial review
TURNOVER
Turnover for the period has increased 332% compared to last year through
increased activity in the entertainment business (up 42%) and through the
inclusion of the turnover generated from the acquisitions of ABG Financial
Management and The Finishing Touch.
OPERATING PROFIT
The operating profit for the Group, before goodwill amortisation and impairment
and one-off exceptional costs was �126,000, an increase of �372,000 for the
comparative period.
A more detailed composition of the results by division can be seen in the
business reviews.
GOODWILL AMORTISATION AND EXCEPTIONALS
Exceptional costs for the last 6 months resulted from the closure costs
associated 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 LIQUIDITY
At 30 April 2006 the cash balance of the group was �292,000, up �473,000 from
the corresponding period last year.
Deferred consideration has been reclassified as provisions for liabilities and
charges. This balance is contingent on the performance of the acquired
businesses, ABG Financial Management Limited and The Finishing Touch (Corporate
Events) Limited and is subject to change.
Deferred consideration is therefore not considered in net debt calculations and
will 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 comprised
of
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)
TAXATION
The tax charge of �41,000 includes a 5% withholding tax charge of �51,000 on a
dividend paid out by FIMO Sport Promotion AG to First Artist Corporation Plc,
as part of the closure costs.
EARNINGS PER SHARE
Earnings per share before exceptional items and goodwill increased from a loss
of 0.48p to a profit of 0.03p, and basic earnings per share also increased from
a loss of 0.59p to a profit of 0.03p. This is directly due to the increased
profitability of the enlarged group and the earnings enhancing means of
financing the acquisitions.
SHAREHOLDERS' FUNDS
Shareholders funds increased from �3.31 million to �3.36 million over the last
6 months, resulting in an increase in net assets per share of 0.1p to 3.8p.
OUTLOOK AND ACQUISITIONS
Our strategy of providing distinct but wholly complementary services: sports
player representation, entertainment and celebrity management, wealth
management and event management, is now a reality and we can look to push
forward as a business, both organically and by further acquisitions.
As well as pursuing organic growth, via cross referrals within the Group and
increased sales activities, we are actively seeking, in addition to the
acquisitions announced on 11 July, further acquisitions and joint ventures in
all 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 expansion
strategy to date. All divisions are trading in line with market expectations
and the Board remains optimistic about the Group's continued success for the
remainder of the year and beyond.
We will be continuing this strategy to strengthen our position in the UK and
Europe by organic and acquisitive growth, integrating these with our strong
core businesses
Jarvis Astaire
Chairman
11th July 2006
Consolidated Profit and Loss Account
For 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) 809
activities before
taxation
Taxation 3 (41) 28 (299)
Profit/(loss) on ordinary 26 (284) 510
activities after taxation
Dividends - - -
Retained profit/(loss) 26 (284) 510
for 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 Sheet
As 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 7,232
LIABILITIES
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 Losses
For 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) 510
period
Currency translation differences 10 (28) (56)
on net foreign currency
investments
Total recognised gains and losses 36 (312) 454
Consolidated Cash Flow Statement
For 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) 915
cash 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 2006
1. Basis of preparation
The financial information contained within this interim report does not
constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985. The interim financial information has been prepared on the
basis of the accounting policies set out in the Group's statutory accounts for
the year ended 31 October 2005.
The figures for the six months ended 30 April 2006 and 30 April 2005 are
unaudited. The figures for the year ended 31 October 2005 have been extracted
from the statutory accounts which have been filed with the Registrar of
Companies and did not contain a statement under Section 237 (2) or (3) of the
Companies 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 39 149
Redundancies
5 51 161
3. Tax charge/(credit)
The tax charge/(credit) is based on the estimated effective rate for the period
as 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) 299
4. Earnings / (loss) per share
The calculations of earnings / (loss) per share are based on the following
profits 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) 510
period
5. Provisions for liabilities and charges
The provisions for liabilities and charges relate to deferred consideration. In
earlier periods this was disclosed as part of creditors.
Deferred consideration represents the estimated amounts payable, although the
final amounts payable are dependent upon the results of the acquired
businesses.
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 - 1,118
one year
Deferred consideration due after 2,021 - 1,505
one year
Total deferred consideration 3,252 - 2,623
6. FRS7
The Company has considered the implications of FRS7. Due to the second half
weighting of the group it has not been able to accurately determine the
standard's effect on these accounts and believes them not to be material. The
effects of the standard will be fully reflected in the Annual statutory
accounts 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 - - 43
goodwill
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) 510
period
Shares issued to acquire - - 135
subsidiary undertakings
Shares issued 14 - 2,001
Issue costs - - (361)
Foreign exchange adjustment 10 (28) (56)
Increase/(decrease) in 50 (312) 2,229
shareholders' funds
Opening shareholders' funds 3,306 1,077 1,077
Closing shareholders' funds 3,356 765 3,306
Shareholders' funds are entirely attributable to equity interests.
11. Interim Report
Copies of this interim report are being sent to all shareholders and are
available to the public at the Company's registered office, First Artist House,
87 Wembley Hill Road, Wembley, Middlesex HA9 8BU.
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