TIDMCTNA
RNS Number : 0162U
Catena Group PLC
31 March 2021
31 March 2021
Catena Group PLC
("Catena" or the "Company")
Interim Results
Catena Group plc ("Catena" or the "Company"), the AIM listed
holding company, is pleased to announce its interim results for the
12 months ended 31 December 2020.
Chairman's Statement and Chief Executive's Review
We are pleased to provide these interim results and update for
the 12 month-period ended 31 December 2020. These results are being
released in an interim format due to the Company's decision to
change its accounting reference date from 31 December to 31 March.
The Company will release audited results for the 15 months ending
31 March 2021 by 30 September 2021.
In January 2020, the Company announced its new strategic focus
on artificial intelligence and machine learning. In the last year,
significant progress has been made to implement this strategy, with
an initial investment in Insight Capital Partners Limited
("Insight") in March 2020 and extensive progress toward the
announced potential acquisition of Insight in the past months.
Also in this time, and as an indication of the investor support
for the new strategy, Catena has completed two successful
fundraises, raising GBP2.3 million to support its initial
investment in Insight and for general working capital purposes.
As a result of the Covid-19 pandemic and the closure of schools
for much of the year, trading has been severely impacted at the
Group's school sport coaching subsidiary, Sport in Schools Limited
("SSL"). This has had an adverse impact on profitability and cash
flow. However, SSL has taken aggressive action to reduce costs and
utilise the various Government support schemes. Due to these
efforts and that of a committed and industrious SSL team, the
business is well positioned to recover as schools have re-opened
and restrictions continue to be lifted. The directors would like to
thank the SSL staff for their extraordinary work during these
challenging times.
For the 12 months ended 31 December 2020 we are reporting a
total comprehensive loss of GBP0.5 million (31 December 2019: loss
GBP0.2 million). The directors are not recommending the payment of
a dividend.
Balance Sheet and Fundraising
Despite operational challenges at the Group's Sport In Schools
business, a combination of taking advantage of various Government
Covid-19 initiatives together with two successful fundraises, has
left the Group with a relatively strong balance sheet as at the
period end. The Group had net current assets of GBP0.9 million
(2019: GBP0.5 million) and cash of GBP1.0 million (2019: GBP0.6
million).
During the twelve-month period, Catena successfully conducted
two fundraises. More recently in September 2020, Catena conducted
an equity subscription raising gross proceeds of GBP0.8 million
(priced at 50 pence per ordinary share), the proceeds being used
for ongoing working capital purposes of the Group. Earlier in the
year in March 2020, Catena raised GBP1.5 million comprising equity
subscription raising gross proceeds of GBP1.0 million (priced at 25
pence per share) and GBP0.5 million of convertible loan notes, the
proceeds being used to fund Catena's GBP1.5 million initial
investment in Insight Capital Partners Limited ("Insight").
Post period end, in March 2021, a total of 1.5 million warrants,
previously issued in 2018, were exercised resulting in additional
proceeds to the Company of approximately GBP0.3 million and the
issue of 1,500,000 new ordinary shares in the Company.
On 8 March 2021, the Company entered into a short-term
shareholder loan with Insight to support the ongoing product
development as work on the proposed acquisition of Insight
continues (the "Loan"). The Loan provides a facility to Insight for
up to GBP400,000, is unsecured and is repayable on demand at any
time. The Loan may be drawn down by Insight in part or in full and
attracts an interest rate of 3% above the Bank of England's Bank
Rate. Interest is accrued daily and payable on the repayment
date.
Insight Capital Partners Limited ("Insight")
In March 2020, Catena acquired a 9.1 per cent. interest in the
issued share capital of Insight for GBP1.5 million cash. At the
time of the investment, Catena was also granted an option to
increase its shareholding in Insight to 30.9 per cent. of Insight's
fully diluted ordinary share capital. This investment is recognised
as a non-current investment measured at cost in the balance
sheet.
In September 2020, the Company announced that it had begun
discussions with respect to Catena potentially acquiring the
balance of the issued share capital of Insight
Pantheon Leisure Plc ("Pantheon")
Catena holds 85.87% of the issued share capital of Pantheon
which in turn owns 100% of The Elms Sport in Schools ("SSL").
Pantheon as a group made a small profit of GBP3k for the 12- month
period ended 31 December 2020 (31 December 2019: loss GBP36k).
Pantheon's results are consolidated into the group accounts of
Catena.
Sports in Schools Limited ("SSL")
SSL turnover fell by 48% in the 12-month period to GBP0.9
million (2019: GBP1.7 million). The decrease is attributable to
school closures in March 2020 brought on by the Covid-19 pandemic.
As a result, the profit recognised in this 12- month period was
GBP53k compared with GBP120k for the prior year.
As previously set out in our 30 June 2020 Interim Results and
2019 Annual Report, SSL has taken aggressive action to reduce
costs, claim under the Government job support schemes and secured
further funds under the Coronavirus Business Interruption Loan
Scheme (CBILS). These actions enabled the business to resume
operations as schools re-opened in the autumn. As a result, revenue
recovered at the end of 2020, although some activities, such as
after-school clubs, were slow to resume, thus preventing a full
return to pre-Covid-19 revenue levels. The renewed school closures
from the start of 2021 have continued to negatively affect revenue.
However, the various government support schemes and earlier
corporate actions have mitigated the financial exposure to the
business.
With schools now re-opened and many activities continuing to
return, albeit slowly, to pre-pandemic levels, the directors are
hopeful that SSL revenue will soon recover.
Corporate governance code
In accordance with the AIM Rules regarding corporate governance
our Interim Report and Company website reflect compliance with (and
any departures from) the guidance set out in the QCA Corporate
Governance Code.
Prospects and investment opportunities
As announced on 8 March 2021, Catena is at an advanced stage in
the proposed acquisition of Insight Capital Partners Ltd
("Insight"), the data science and machine learning solutions
company. The directors expect to publish an admission document
shortly, which will include a circular to shareholders and notice
of a general meeting to approve, among other things, the proposed
acquisition of Insight. The directors are pleased with the progress
made both on the acquisition as well as business and product
development at Insight in preparation for the enlarged company
following acquisition. Upon completion of the acquisition of
Insight, and pending shareholder approval, the Company intends to
change its name to Insig AI Plc in order to better represent the
new operational focus of the enlarged group.
M Farnum- Schneider
Chief Executive and Interim Chairman 31 March 2021
Consolidated statement of comprehensive income for the 12 months
ended 31 December 2020
Unaudited Unaudited Unaudited
6 months 12 months 6 months Audited
-1 July to ended 31 -1 July to Year ended
31 December December 31 December 31 December
2020 2020 2019 2019
GBP GBP GBP GBP
Revenues from trading
activity 433,603 883,133 739,839 1,683,272
Cost of revenues (329,889) (630,254) (366,111) (818,158)
103,714 252,879 373,728 865,114
Administrative expenses (551,399) (1,186,620) (557,237) (1,051,971)
Other operating income
Coronavirus Job Retention
Scheme and local government
grants 227,274 443,763 -
Operating loss from
continuing activities (220,411) (489,978) (183,509) (186,857)
Finance income 112 540 690 1,273
Finance costs (1,283) (2,193) (2,566) (2,566)
Loss before taxation
from continuing activities (221,582) (491,631) (185,385) (188,150)
Taxation - - - -
------------- ------------ ------------- -------------
Loss after taxation
from continuing activities (221,582) (491,631) (185,385) (188,150)
Loss for the year from
discontinued activities (749) (2,904) (17,565) (30,058)
Total comprehensive
loss (222,331) (494,535) (202,950) (218,208)
============= ============ ============= =============
Attributable to:
Owners of the company (225,849) (494,942) (189,106) (213,197)
Non- controlling interests 3,518 407 (13,844) (5,011)
--------------------- ----------------------- -------------------- ----------
(222,331) (494,535) (202,950) (218,208)
===================== ======================= ==================== ==========
Loss per share (basic
and diluted)
Loss from continuing
activities per share (0.0055)p (0.0125)p (0.0050)p (0.0053)p
Loss from discontinued
activities per share (0.0001)p (0.0001)p (0.0004)p (0.0010)p
--------------------- ----------------------- -------------------- ----------
Total loss per share (0.0056)p (0.0126)p (0.0054)p (0.0063)p
===================== ======================= ==================== ==========
Statement of financial position as at 31 December 2020
Unaudited Audited
As at 31 December As at 31 December
2020 2019
GBP GBP
Non- current assets
Unlisted investments (note 5) 1,500,000 -
Goodwill and patents 59,954 59,954
Property, plant and equipment 56,404 72,104
Total non-current assets 1,616,358 132,058
-------------------- -------------------
Current assets
Trade and other receivables 117,292 109,635
Cash and cash equivalents 1,032,065 636,779
-------------------- -------------------
Total current assets 1,149,357 746,414
-------------------- -------------------
Total assets 2,765,715 878,472
Current liabilities
Trade and other payables 223,615 267,162
Bank loan - (unsecured) 24,000 -
Lease commitments 8,333 8,333
-------------------- -------------------
Total current liabilities 255,948 275,495
-------------------- -------------------
Non-current liabilities
Bank loan (unsecured) 216,000 -
Borrowings (convertible unsecured loan
notes) 500,000 -
Leasing obligations 40,619 49,294
-------------------- -------------------
Total non-current liabilities 756,619 49,294
-------------------- -------------------
Total liabilities 1,012,567 324,789
NET ASSETS 1,753,148 553,683
==================== ===================
Equity
Share capital 2,464,664 2,408,664
Share premium 2,666,031 1,048,031
Merger reserve 325,584 325,584
Retained earnings (3,639,664) (3,164.722)
Equity attributable to owners of the
company 1,816,615 617,557
Non-controlling interest (63,467) (63,874)
Total Equity 1,753,148 553,683
==================== ===================
Consolidated statement of changes in equity for the 12 months
ended 31 December 2020
Unaudited Audited
Year ended Year ended
31 December 31 December
2020 2019
GBP GBP
Total equity at the beginning of year 553,683 458,300
Adjustment for the adoption of IFRS 16
in relation to leased assets - 8,591
Issue of shares 1,800,000 290,000
Share issue costs (126,000) (4,000)
Share based payments 20,000 19,000
Loss for the period/year (494,535) (218,208)
At end of year 1,753,148 553,683
============= =============
Consolidated statement of cash flows for the 12 months ended
31 December 2020
Unaudited
12 months Audited
ended 31 Year ended
December 31 December
2020 2019
GBP GBP
Operating cash flow
Profit from continuing activities (491,631) (188,150)
Profit from discontinued activities (2,904) (30,058)
------------ -------------
(494,535) (218,208)
Adjustments for:
Depreciation and amortisation 16,215 18,764
Finance income (540) (1,273)
Finance costs 2,193 2,566
Share based payments 20,000 19,000
Operating cash flow before working capital
movements (456,667) (179,151)
Increase in receivables (7,657) (19,875)
(Decrease)/Increase in payables (43,547) 27,251
Net cash absorbed by operations (507,871) (171,775)
------------
Cash flow from Investing activities
Purchase of investments (1,500,000) -
Property, plant and equipment acquired (515) (3,180)
Finance income 540 1,273
Net cash used in investing activities (1,499,975) (1,907)
------------ -------------
Financing activities
Proceeds from share issues 1,674,000 286,000
Loan notes issued 500,000 -
Bank loan advanced 240,000 -
Finance costs (2,193) (2,566)
Repayment of leasing liabilities and borrowings (8,675) (8,302)
Net cash from financing activities 2,403,132 275,132
------------ -------------
Net increase in cash and cash equivalents 395,286 101,450
Cash and cash equivalents and bank overdraft
at the beginning of the year 636,779 535,329
Cash and cash equivalents at the end of
the year 1,032,065 636,779
============ =============
Notes to the financial statements for the 12 months ended 31
December 2020
General information
Catena Group plc (the "Company") is a company domiciled in
England and its registered office address is 30 City Road, London
EC1Y 2AB. The condensed consolidated interim financial statements
of the Company for the 12 months ended 31 December 2020 comprise
the Company and its subsidiaries (together referred to as the
"Group").
The condensed consolidated interim financial statements do not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006.
The financial information for the year ended 31 December 2019
has been extracted from the statutory accounts. Although the
auditors' report on those statutory accounts was unqualified, the
accounts included a material uncertainty paragraph relating to
Going Concern without qualifying their report which did not contain
a statement under Section 498(2) or (3) of the Companies Act 2006.
A copy of those accounts has been filed with the Registrar of
Companies.
The Group has presented its results in accordance with the
measurement principles set out in International Financial Reporting
Standards as adopted by the EU ("IFRS") using the same accounting
policies and methods of computation as were used in the annual
financial statements for the year ended 31 December 2019 with
exception of the application of new accounting standards. As
permitted, the interim report has been prepared in accordance with
the AIM rules for companies but is not compliant in all respects
with IAS34 'Interim Financial Statements'.
The condensed consolidated interim financial statements do not
include all the information required for full annual financial
statements and therefore cannot be construed to be in full
compliance with IFRS.
The condensed consolidated interim financial statements were
approved by the board and authorised for issue on 31 March
2021.
2. Impact of the Covid-19 pandemic
As indicated in our Interim Results for the six months ended 30
June 2020 and 2019 Annual Report, the school closures resulting
from the Covid-19 pandemic have negatively impacted revenues and
profitability at its trading subsidiary, SSL. Prior to the
pandemic, forecast levels of turnover for 2020 were expected to
result in increased profits in the current year.
Throughout the pandemic, SSL has taken aggressive action to
mitigate the financial impact of the pandemic by utilising the
Government's Covid-19 financial assistance schemes. While revenue
recovered at the end of 2020 due to the re-opening of schools, some
activities, including after-school clubs, have been slow to resume,
thus preventing a full return to budgeted revenue levels. However,
SSL continued to take full advantage of the Government's extended
Covid-19 business support schemes and benefited from the actions
taken earlier in the year to protect the business against school
disruptions or closures.
The renewed school closures from the start of 2021 have
continued to negatively affect revenue. However, the government
support schemes and earlier corporate actions have continued to
protect the business. With schools now re-opened and many
activities continuing to return, albeit slowly, to pre-pandemic
levels the directors are hopeful that SSL revenue and profitability
will soon recover. However, as we have seen previously. the ongoing
impacts of the global pandemic continues to evolve and it is
difficult for the directors to predict with certainty whether there
will be further restrictions to school operations and sporting
activities that would once again affect SSL operations.
3. Basic and diluted loss per share
Comprehensive loss per share for the six months ended 31
December 2020 has been calculated on the comprehensive loss
attributable to owners of the Company of GBP225,849 and on the
weighted average number of shares in issue during the period of
40,488,414.
Comprehensive loss per share for the 12 months ended 31 December
2020 has been calculated on the comprehensive loss attributable to
owners of the Company of GBP494,942 and on the weighted average
number of shares in issue during the period of 39,317,150.
Comprehensive loss per share for the six months to 31 December
2019 has been calculated on the comprehensive loss attributable to
owners of the company of GBP189,106 and on the weighted average
number of shares in issue during the period of 35,222,841.
Comprehensive loss per share for the year ended 31 December 2019
has been calculated on the comprehensive loss attributable to
owners of the company of GBP213,197 and on the weighted average
number of shares in issue during the year of 34,438,352.
In view of group losses for all periods, share options and
warrants to subscribe for ordinary shares in the Company are
anti-dilutive and therefore diluted earnings per share information
is not presented.
4. Business segment analysis
Unaudited Unaudited Unaudited
6 months 12 months 6 months Audited
-1 July ended 31 -1 July Year ended
to 31 December December to 31 December 31 December
2020 2020 2019 2019
Turnover
Sports and Leisure 433,603 883,133 739,839 1,683,272
Social media - discontinued
activity - - 30 71
------------------- ------------------- ---------------------- ----------------------
433,603 883,133 739,869 1,683,343
------------------- ------------------- ---------------------- ----------------------
Segmental operating
profit/(loss)
Sports and Leisure 51,750 53,109 (92,915) 20,215
Social media - discontinued
activity (749) (2,904) (17,565) (30,058)
------------------- ------------------- ---------------------- ----------------------
51,001) 50,205 (110,480) (9,843)
Group operating expenses (272,161) (543,087) (90,594) (207,072)
Operating loss (221,160) (492,882) (201,074) (216,915)
Finance income 112 540 690 1,273
Finance costs (1,283) (2,193) (2,566) (2,566)
------------------- ------------------- ---------------------- ----------------------
Loss before tax from all
activities (222,331) (494,535) (202,950) (218,208)
Taxation - - - -
Loss after tax from all
activities (222,331) (494,535) (202,950) (218,208)
=================== =================== ====================== ======================
5. Investments
In March 2020, the company acquired a 9.1% interest in the
ordinary share capital of Insight for GBP1,500,000 in line with the
strategy to focus on investing in quality fast growing companies.
In 2020, the Company began discussions with respect to Catena
acquiring the balance of issued share capital of Insight, the
announcement of which on 3 September 2020 resulted in the Company's
ordinary shares being suspended from trading on AIM. Good progress
continues to be made on the proposed acquisition. Further details
will be provided in the Company's admission document in respect of
the proposed acquisition, which the directors expect to publish in
due course.
* ENDS *
For further information, please visit www.catenagroup.co.uk or contact:
Catena Group PLC
Matthew Farnum-Schneider, Chief Executive +44 (0)20 3744 0900
Zeus Capital Limited (Nominated Adviser
& Broker)
David Foreman / Daniel Harris / Rishi Majithia +44 (0) 203 829 5000
SEC Newgate (Financial PR) +44 (0) 7540 106 366
Robin Tozer catena@secnewgate.com
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