RNS Number:9607M
First Artist Corporation PLC
30 November 2006
30 November 2006
First Artist Corporation Plc
Preliminary Results for the period ended 31 August 2006
First Artist Corporation Plc (AIM:FAN) is one of the leading marketing and
entertainment management agencies in the UK today, with a full-service group
that includes wealth management, events, sponsorship, media marketing and sports
and entertainment representation.
Further acquisitions in the period, along with continued organic and synergistic
growth from ongoing businesses has seen the group transformed, in particular
into the Entertainment and Media sectors, whilst strategically growing its
Sports representation business to become a leading force in all the major
European markets.
KEY POINTS
The performance highlights from the last 10 month period compared to the
previous 12 months are:
* Turnover up 62% to #9,508,000
* EBITA* up 63% to #1,720,000
* Profit before tax up 57% to #1,267,000
* EPS before taxation, amortisation of goodwill and exceptional costs
1.01p,
* Net assets per share up 27% to 4.7 pence
* Consolidated net assets up 54% to #5,089,000
*(Earnings before interest, tax and amortisation (EBITA) is stated before
exceptional administrative expenses)
We have successfully completed the acquisition and integration of three
businesses that have strengthened the representation division and extended the
range of services that we offer into new business areas:
* ProActive Scandinavia A/S (renamed First Artist Scandinavia A/S) - Sport
Representation
* NCI Management Limited - Entertainment Representation Agency
* Sponsorship Consulting Limited - Corporate Sponsorship Advisors
Jon Smith, Chief Executive of First Artist Corporation commented:
'Another strong performance during the period has seen our acquisition strategy,
focussed on acquiring earnings enhancing businesses that will generate new
revenues through synergy with the rest of the group, transform a company, with a
significant dependency on a single source of revenue, to a broad-based group
with stable and growing, year-round income streams. The synergies within the
Group are not only revenue-generating; they also position First Artist as a key
player in the media marketplace through its involvement at different stages in
the content generation process.'
For further information please contact:
FIRST ARTIST CORPORATION PLC
Jon Smith, Chief Executive: +44 (0) 208 900 1818
Richard Hughes, Group Managing Director
Dawnay Day Corporate Finance
David Floyd: +44 (0) 0207 509 4570
Hudson Sandler Financial & Corporate Communications
Michael Sandler: +44 (0) 207 710 8916
CHAIRMAN'S STATEMENT
I am happy to report on another strong set of results, which demonstrates just
how exciting the future is for First Artist Corporation. This is now a
fully-fledged media, representation and management Group, rooted in high-quality
personal service. We enjoy strong relationships with our clients from the worlds
of sport and entertainment and this is a highly valuable asset in today's media
landscape.
STABLE GROWTH FROM A BROADER BASE
The strength and stability of our broader business model is shown by a 63% rise
in EBITA*, and the fact that the Group was able to report a profit at its
interim results for the first time. The Group is benefiting from a deliberate
strategy to reduce its dependence on football and the seasonal revenues that it
provides whilst continuing to grow this profitable and highly regarded division
and strengthen its position within its market. Non-football businesses now
account for 56% of the Group's turnover and strong growth is evident in our
wealth management, entertainment and events businesses.
We are proud to have developed a corporate culture dedicated to supporting
successful businesses and providing them with opportunities for further growth.
The synergies within the Group have already resulted in significant
cross-referral of new business, whilst First Artist Corporation's infrastructure
and international network provides our newly acquired businesses with important
strategic opportunities.
The three new acquisitions made this period have further broadened the Group's
income base, increasing the size of our entertainment division, opening up
exciting new opportunities in the field of sponsorship, and establishing a truly
pan-European player representation network.
TAKING A LEAD IN CORPORATE RESPONSIBILITY
A responsible approach to business is a key element of the First Artist
positioning, and provides us with a valuable competitive edge in each of our
markets.
First Artist Sport has long argued for stricter regulation of the player
representation business, and is co-operating fully with the English Premier
League inquiry. We believe that this will hasten the consolidation of the player
representation business around professional, respected and credible agents and
that our reputation for honesty and integrity will therefore become a major
asset in the medium-term.
It is a firm principle of our player representation business that sportsmen and
women should never be exploited beyond their own best interests. We carefully
manage commercial activities to allow rest and recuperation, and protect our
clients' most important asset: their performance on the field. This sensitive
approach to representation ensures quality service and strong client
relationships.
Sponsorship Consulting has a proud record advancing the role of sponsorship in
Corporate Responsibility (CR) strategy and we look forward to this continuing as
part of First Artist Corporation.
DEWYNTERS
We look forward to a successful EGM confirming the acquisition of Dewynters.
This will be a significant milestone in our Group's growth and development. We
look forward to working with Anthony Pye-Jeary and his team over the coming
years
Jarvis Astaire
Chairman
29 November 2006
*(Earnings before interest, tax and amortisation (EBITA) is stated before
exceptional administrative expenses)
CHIEF EXECUTIVE'S STATEMENT
I would like to thank all at First Artist Corporation for their diligent efforts
in a hugely important period. We have successfully integrated the events and
wealth management businesses acquired at the end of last year, boosted our
offering in entertainment and opened up major new opportunities in sponsorship.
The result is a broad, full-service and highly profitable media and
entertainment management group and the strength of this positioning is clearly
demonstrated by this period's results.
First Artist has been transformed in the last two periods to become a strong and
growing integrated business benefiting from strong synergies and increasing
cross referral of business between group companies. This strength has allowed us
to now take that quantum leap forward with the acquisition of marketing services
and advertising group Dewynters, which we hope to be confirmed at the
forthcoming Extraordinary General Meeting.
Led by Anthony Pye-Jeary, Dewynters is the UK's leading entertainment and
theatre media business, dominating London's West End theatre marketing, but also
working with a considerable number of clients in the Arts and Culture sector,
all of which have natural synergies with the rest of the group, in particular
events and sponsorship. The group has a rapidly expanding US merchandising
operation based in New York and Las Vegas and with the increasing number of
shows moving east and west across the Atlantic the future looks very good for
this business and the benefits it can bring to First Artist.
Upon the successful completion of this acquisition and to reflect the level of
expansion of First Artist, Richard Hughes will become Group Managing Director,
whilst Simon Bent will step up to become our Prospective Group Finance Director.
Julianne Coutts will also join us and become Group Company Secretary and Head of
Human Resources.
Phil Smith will remain as Chief Operating Officer with special responsibility
for the Sport and Entertainment divisions.
I would very much like to thank Vincenzo Morabito for his significant and
continuing contribution to this group. Vincenzo is stepping down as a Group
Board Director to become Group Head of Football, concentrating his talents and
efforts co-ordinating the development of and communications between our 3 main
football offices and associated agents worldwide.
Vincenzo will join the Executive Management Board, which consists of the
Directors of each divisional group company. This Board has direct responsibility
to promote cross referral opportunities, ensure the quality of internal
communications and promote group management responsibilities.
2006 Divisional Performance
Optimal Wealth Management (formerly ABG Financial Management) is now established
as a cornerstone of the Group delivering a 35% increase in turnover and a 95%
increase in operating profit on the like for like audited 12 month periods ended
June 2006 and 2005. The changes in pension regulation introduced in April on "A
day" have resulted in significant new business, the benefits of which we believe
will continue for sometime. Optimal has also benefited sizably from increasing
cross referral of business from within the group. Our joint venture with the Top
25 audit firm HW Fisher will provide a new market for the high quality, in-depth
financial advice offered by the company. Optimal is now a vital part of the
integrated service provided by our sport and entertainment representation
businesses.
Our event management company, The Finishing Touch, also enjoyed a strong period,
with turnover increasing by 11% on the like for like audited 12 month periods
ended April 2006 and 2005. Our joint venture with Lord Coe's Complete Leisure
Group is a significant transaction that we believe will deliver sizable benefits
to each company in the coming years.
The acquisition of NCI Management has transformed the scale of First Artist
Entertainment. The enlarged company's expertise in discovering talent and
developing the media brand of clients such as Dr. Gillian McKeith, Amanda Lamb
and Peter Schmeichel will be a key element in First Artist Entertainment's
strategy going forward.
Sponsorship Consulting, which was acquired in August 2006, will play a key role
in the future development of the First Artist Group. Our activities in sport and
entertainment have always produced significant opportunities to refer
sponsorship-related business and Sponsorship Consulting will allow us to provide
these services from within the Group.
Finally, the arrival of First Artist Scandinavia (formerly Proactive
Scandinavia) completes the establishment of a truly pan-European First Artist
Management network, with our operations centred in Denmark and Italy as well as
the UK. This will produce both a broader income base and new strategic
opportunities for our player management business.
We fully support the English Premier League inquiry into the way football
transfers are conducted and are working to introduce more transparency to the
industry through discussions with the FA and FIFA, and our role as a founding
Board Member of the Football Agents Association. We believe that the
consolidation of the industry around professional, credible agents will deliver
long term benefits to First Artist Management.
Ongoing Group Development
Our approach to building the Group has centred on finding strong, successful
businesses and then providing them with a rich environment for finding
additional revenues. The natural synergies of the Group have delivered major new
business opportunities for Optimal Wealth Management and The Finishing Touch,
and First Artist's existing international network will give a significant
strategic advantage to Sponsorship Consulting.
We will look to make further acquisitions over the next year, where we identify
businesses that will find similar opportunities to grow within the Group. The
transformation of our business will allow us to expand our offer into TV
production and other areas of sponsorship and management, producing still more
synergies and opportunities for growth.
It is a disappointment to us that the share price of the Group has yet to
reflect the transformation of our business. Our profits growth, continued
expansion, earnings enhancing acquisitions, diversity and visibility of
earnings, strong balance sheet and cash flows we hope, will lead to a
strengthening share price on the Market, where the Group currently trades at a
p/e ratio significantly below the sector average.
We are actively working with analysts and the media to correct any outdated
perceptions of our business in the city and we look forward to seeing the
advances made by the Group more closely reflected in future trading.
Jon Smith
Chief Executive Officer
29 November 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 AUGUST 2006
Continuing
operations Acquisitions Total
10 months 10 months 10 months Year
ended ended ended ended
31 August 31 August 31 August 31 October
2006 2006 2006 2005
#000 #000 #000 #000
TURNOVER 8,402 1,106 9,508 5,861
Cost of sales (3,086) (82) (3,168) (1,325)
-------- -------- -------- --------
GROSS PROFIT 5,316 1,024 6,340 4,536
Administrative expenses (4,231) (559) (4,790) (3,686)
-------------------------- -------- -------- -------- --------
EBITA before exceptional
administrative expenses 1,255 465 1,720 1,054
Exceptional administrative
expenses (170) - (170) (161)
Goodwill impairment and
amortisation - - - (43)
-------------------------- -------- -------- -------- --------
OPERATING PROFIT 1,085 465 1,550 850
======== ========
Interest receivable 21 11
Interest payable (304) (52)
-------- --------
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION 1,267 809
Taxation (502) (299)
-------- --------
RETAINED PROFIT FOR THE
PERIOD / YEAR 765 510
======== ========
EARNINGS PER SHARE 0.83 0.89
Basic earnings per share pence pence
======== ========
Fully diluted earnings per
share 0.81 0.88
pence pence
======== ========
CONSOLIDATED BALANCE SHEET
AS AT 31 AUGUST 2006
31 August 31 October
2006 2005
#000 #000
FIXED ASSETS
Intangible assets 9,517 5,295
Tangible assets 835 719
Investments 118 -
-------- --------
10,470 6,014
-------- --------
CURRENT ASSETS
Debtors 6,895 4,746
Cash at bank and in hand 1,108 1,527
-------- --------
8,003 6,273
CREDITORS: Amounts falling due within one year (7,709) (5,055)
-------- --------
NET CURRENT ASSETS 294 1,218
-------- --------
TOTAL ASSETS LESS CURRENT LIABILITIES 10,764 7,232
CREDITORS: Amounts falling due after more than one
year (2,252) (1,303)
PROVISIONS for liabilities and charges (3,423) (2,623)
-------- --------
NET ASSETS 5,089 3,306
======== ========
CAPITAL AND RESERVES
Called up share capital 270 224
Capital redemption reserve 15 15
Share premium account 8,849 7,888
Shares to be issued 5 -
Profit and loss account (4,050) (4,821)
-------- --------
EQUITY SHAREHOLDERS' FUNDS 5,089 3,306
-------- --------
CONSOLIDATE CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31 AUGUST 2006
10 months Year
ended ended
31 August 31 October
2006 2005
#000 #000
Cash inflow/(outflow) from operating activities 80 (12)
Returns on investments and servicing of finance (102) (35)
Taxation (450) (4)
Capital expenditure and financial investment (241) (3)
Acquisitions and disposals (2,749) (2,126)
------- -------
CASH OUTFLOW BEFORE FINANCING (3,462) (2,180)
Financing 3,071 3,095
------- -------
(DECREASE) / INCREASE IN CASH IN THE PERIOD / YEAR (391) 915
======= =======
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
10 months Year
ended ended
31 August 31 October
2006 2005
#000 #000
(Decrease)/increase in cash in the period (391) 915
Cash from increase in debt financing (2,173) (1,412)
New finance leases 34 -
Loan notes and additional funding (623) -
------- -------
(3,153) (497)
NET DEBT AT 1 NOVEMBER 2005 (648) (151)
------- -------
NET DEBT AT 31 AUGUST 2006 (3,801) (648)
======= =======
STATEMENT OF RECOGNISED GAINS AND LOSSES
FOR THE PERIOD ENDED 31 AUGUST 2006
10 months Year
ended ended
31 August 31 October
2006 2005
#000 #000
Profit for the financial period/year 765 510
Currency translation differences on net foreign
currency investments 6 (56)
------- -------
Total recognised gains and losses relating to the
period/year 771 454
======= =======
NOTES
1. BASIS OF ACCOUNTING
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 contained in this report has been extracted from the
audited accounts of the Company for the year to 31st August 2006 for which the
auditors have given an unqualified report.
The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards in the United Kingdom.
10 months Year
ended ended
31 August 31 October
2006 2005
2. TAXATION #000 #000
Current tax:
UK corporation tax charge on profits of
the period 351 106
Foreign taxes 175 118
Adjustments in respect of previous periods (24) -
------- -------
Current tax charge for the period 502 224
Deferred taxation:
Origination and reversal of timing differences - 75
------- -------
Tax charge on profit on ordinary activities 502 299
======= =======
3. EARNINGS PER SHARE
The calculation of earnings per share are based on the following profits and
number of shares:
10 months Year
ended ended
31 August 31 October
2006 2005
#000 #000
Profit on ordinary activities after taxation 765 510
======= =======
2006 2005
No of Shares No of Shares
For basic earnings per share 92,664,723 57,034,181
Dilutive effect of share options 2,181,826 1,005,773
---------- -----------
For diluted earnings per share 94,846,549 58,039,954
========== ===========
4. RESERVES AND RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
Profit
Shares Capital and Total
Share to be redemption Share Loss shareholders'
capital issued reserve premium account funds
#000 #000 #000 #000 #000 #000
GROUP
1 November 2005 224 - 15 7,888 (4,821) 3,306
Retained profit for
the financial period - - - - 765 765
Share placement issue 42 - - 963 - 1,005
Shares issued to vendors
to acquire subsidiary
undertakings 2 - - 69 - 71
Shares issued to vendors
as deferred consideration 1 - - 35 - 36
Shares to be issued to
vendors as deferred
consideration - 5 - - - 5
Shares issued 1 - - 14 - 15
Issue costs - - - (120) - (120)
Exchange adjustments - - - - 6 6
------- ------- ------- ------- ------- -------
31 August 2006 270 5 15 8,849 (4,050) 5,089
======= ======= ======= ======= ======= =======
Profit
Shares Capital and Total
Share to be redemption Share Loss shareholders'
capital issued reserve premium account funds
#000 #000 #000 #000 #000 #000
COMPANY
1 November 2005 224 - 15 7,888 (5,432) 2,695
Retained profit/(loss)
for the financial
period - - - - 1,385 1,385
Share placement issue 42 - - 963 - 1,005
Shares issued to vendors
to acquire subsidiary
undertakings 2 - - 69 - 71
Shares issued to vendors
as deferred consideration 1 - - 35 - 36
Shares to be issued to
vendors as deferred
consideration - 5 - - - 5
Shares issued 1 - - 14 - 15
Issue costs - - - (120) - (120)
------- ------- ------- ------- ------- -------
31 August 2006 270 5 15 8,849 (4,047) 5,092
======= ======= ======= ======= ======= =======
10 months Year
ended ended
31 August 31 October
5. CASH FLOWS 2006 2005
#000 #000
Reconciliation of operating profit to net cash
inflow / (outflow) from operating activities
Operating profit 1,550 850
Depreciation 73 65
Impairment of goodwill - 43
(Profit)/loss on disposals of fixed assets (9) 5
(Increase) in debtors (1,389) (1,608)
(Decrease)/increase in creditors (151) 689
Exchange differences 6 (56)
------- -------
Net cash inflow / (outflow) from operating
activities 80 (12)
------- -------
6. ANNUAL REPORT
Copies of the Annual report and Financial Statements will be 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
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