(CMX) Catalyst Media

Catalyst Media Group Plc

("CMG" or the "Company")

Final results for the 15 months ended 30 June 2011

The Board of Catalyst Media Group ("CMG") is pleased to announce the final results for the Company covering the 15 month accounting period to 30 June 2011. CMG is a 20.54 per cent. shareholder of Satellite Information Systems (Holdings) Ltd ("SIS") and the results for the period to 30 June 2011 incorporate its share of the profits of SIS for its year ended 31 March 2011.

Highlights

·      Profits after taxation of £2.5million (12 months to 31 March 2010: £3.8 million.)

·      Net assets of £32.7 million ( 2010: £29.5million)

·      Net assets per share116.p (2010:  105p)

·      Earnings per share 8.47p (2010: 14.29p)

·      Total revenues of SIS £256 million (2010: £198 million)

·      SIS profit after tax £9.1m(2010: £15.7m)

Enquiries:

CMG:

Michael Rosenberg

+44 (0) 77 8572 7595     

Non Executive Chairman

Melvin Lawson

+44 (0) 20 7637 8412     

Non-Executive Director         

Strand Hanson Limited

+44 (0) 20 7409 3494     

James Harris

Angela Peace

Chairman's statement

I am pleased to report that for the 15 month period ended 30 June 2011, CMG recorded profit after taxation, including its 20.54% equity share of the profits of Satellite Information Services Ltd (SIS) for its year ended 31 March 2011, of £2.5 million (2010: £3.8 million) with earnings per share from continuing operations of 8.47p (2010: 14.29p). Net assets as at 30 June 2011 were £32.7 million (2010: £29.5 million) with Net assets per share of 116p (2010: 105p).

For the year ended 31 March 2011, SIS generated turnover of £256 million (2010: £198 million). The profit of SIS for that year has been impacted by a provision of £5.9 million deemed necessary in connection with its contract covering the Commonwealth Games in India in 2010 referred to in more detail below, and also by start up costs of £855,000 relating to the joint venture with Peel Media Services (Studios) Ltd ("Peel Media") to manage the studios and all post production content and technical services at Media City in Salford Quays, Manchester. Prior to these provisions, operating profit before interest and tax for the year was £22.8 million compared to £24.7 million in the previous year. Net profit before taxation, including all provisions was £13.5 million (2010: £23.3 million) with profit after tax of £9.1 million (2010: £15.7 million).

SIS is one of the most experienced television, production and outside broadcast service providers in Europe and considers itself a world leader in the television broadcasting industry. Its position was particularly enhanced by the acquisition on 1 April 2008 of the BBC Outside Broadcast business. Further outside broadcast trade and asset acquisitions during the last year have added additional equipment and trucks to the existing fleet. The Group now has over 110 uplink vehicles covering the spectrum of state-of-the-art uplink trucks, and with its proprietary automated uPOD technology and its rapidly deployed, dismountable Drive Fly kits, it is now the largest provider of transportable satellite uplink services in the world, transmitting tens of thousands of hours of live coverage every year to broadcasting customers worldwide. 

The services provided by SIS to the betting industry are supported in the main by fixed term contracts both with the retail owners of betting shops and with the racecourses that enable pictures to be delivered to those shops. Following the signing by SIS of long term rights agreements with Arena Leisure Plc and Northern Racing Limited, combined with other courses that have subsequently renewed contracts, SIS now holds long term media rights representing in excess of 50% of all UK horse racing fixtures. This ensures the supply of images and data from the coverage of horseracing fixtures at racecourses including Royal Windsor, Lingfield Park, Chepstow and Fontwell Park until 2016 and 2017. The services provided by SIS also include exclusive coverage of Irish racing fixtures.

SIS provides more than 45,000 betting opportunities per year to its customers from UK and international horseracing, including racing from 28 UK and 26 Irish tracks together with other countries including South Africa, France, Germany and the UAE. In addition its betting services cover football and also greyhound racing with exclusive contracts with Bookmakers Afternoon Greyhound Services, known as BAGS till 2015.

SIS has now launched a new range of football data services aimed at assisting the betting industry to generate new business. This move follows the acquisition by SIS of the Football DataCo rights for the exclusive distribution to the betting industry of live match data for the English and Scottish leagues. In addition there will be data from the Champions League, the Europa League and qualifying matches from 2012.

Shareholders of SIS include certain bookmaker customers, Ladbroke, William Hill, Fred Done of Betfred and the Tote as well as financial investors being CMG and Caledonia Investments.

The results of SIS for the year ended 31 March 2011 are as follows:-

The revenues of SIS included £124 million derived from the long established business of providing integrated television and data services to licensed betting offices in the UK, Ireland and overseas. This division contributed approximately £12 million to operating profits.

Revenues of £133 million were generated from the business of SISLIVE which provides satellite news gathering and associated transmission services to its customers and also provides outside broadcast television production units including sound support and communication. This division made a loss of approximately £1.0 million after the provision referred to above relating to the Commonwealth Games project.

A further £26 million of revenues came from other services included the production of pictures to the licensed betting offices and services offered to overseas customers. These services contributed approximately £5.9 million to operating profits.  

Growth in turnover of SIS for the year to 31 March 2011 was 29% compared to 2.7% in 2010. The most significant drivers for the increase in revenue during 2011 relates to revenues from the Commonwealth Games contract and content price increases for licensed betting office subscribers and additional BBC and non BBC revenue.

The SIS group operating profit margin decreased in 2011 to 6.6% from 12.5% in the previous year primarily due to the provision of £5.9m referred to above relating to the Commonwealth Games.

Net debt of the SIS group as at the year end was £27.1m (2010: £28.5m).

On 5^th July 2010, SIS entered into a joint venture agreement with Peel Media to form MediaCity Studios Ltd ("MediaCity Studios"). The company commenced trading in December 2010 and provides studio, technical and production services at Media City in Salford. MediaCity Studios currently has a contractual relationship with Peel Media for provision of services to the BBC for an initial contractual period of ten years with an option to extend.

SIS has also announced plans to relocate its London operation and some of its Milton Keynes operations to Media City in Salford. The move is expected to be completed in 2013 and will involve further capital expenditure and certain non-recurring operational costs. As part of their move SIS LIVE is installing and commissioning the largest broadcast teleport in the North of England. SIS LIVE has expanded with a move into a new expanded facility in Paris to serve broadcast and media customers throughout France. The facility is located close to the Eiffel Tower. A total of 19 people are employed in Paris.

SIS won the prestigious contract to provide the production and coverage facilities and services to cover the XIX Commonwealth Games which took place in India in October 2010. Under the terms of the agreement, SIS LIVE provided all the production facilities and personnel to cover 17 different sports across 12 venues in Delhi, as well as the Games' opening and closing ceremonies. As well as providing the technical infrastructure to cover the Games, SIS LIVE provided over 1,000 highly skilled technical and production staff at the 12 venues.

A partnership in the name of SIS LIVE was set up in January 2010 as a special purpose vehicle to deliver the production and facilities for the Games. While the TV coverage was concluded successfully (and generated plaudits from the international television community) due to post Games developments in India beyond SIS's control, approximately 40% of amounts still owing under the contract have not yet been paid. A corresponding proportion has been withheld by SIS LIVE from its principal Indian subcontractor and legal proceedings have been initiated to recover the outstanding payment from the Indian broadcaster. As a result of these ongoing discussions the provision referred to above of £5.9m has been recognized in the accounts of SIS.

Dividend Policy

The policy of SIS has been to distribute 50% of available profits by way of dividend, subject to cash considerations. However, the board of SIS is currently considering certain strategic investment opportunities which, should they proceed, would require significant additional funding. In light of such potential investment plans, no dividend will be declared by SIS until such time as there is further certainty as to the likely outcome of its deliberations. Should SIS determine to proceed with any of the potential investments in the near future it is likely that dividends would be temporarily suspended with the intention to resume payments at the end of 2013. If it is decided not to go ahead with any such investments then dividend payments are expected in line with current policy.

CMG overheads

The net overheads of CMG now run at an annualised rate of approximately £175,000 excluding exceptional items and interest and are expected to stay at that level for the foreseeable future. Pending a decision on the timing of a dividend by SIS the Board has put in place facilities to ensure that sufficient funds are available to support the business of CMG.

AGM

Notice of the Annual General Meeting is attached. This will be held at 9.30am on Monday 12th December at the office of GAM, 20 King St London SW1Y6QY There will be a Special Resolution proposed to renew the authority given last year for the company to purchase up to 15% of its share capital in the market. To date no shares have been purchased under this authority.

Conclusion

The main objective of the Board has been to reduce overheads to a minimum while focusing on its investment in SIS. It is hoped that in due course the flow of dividends from SIS should eliminate borrowings which currently stand at £650,000 and enable a policy of distributions to shareholders to commence. In the interim, arrangements have been made to re-finance the existing outstanding debt due to be repaid by end of December 2011.

Whilst the current potential investment plans of SIS have resulted in there being some uncertainty as to whether a dividend will be received by the Company in the current year, the Directors are confident that any strategic investments made by SIS, in the event that these were to proceed, should ultimately be anticipated to result in a longer term enhancement in shareholder value for the benefit of all CMG shareholders.

Michael Rosenberg OBE

Chairman

17^th NOVEMBER 2011

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Consolidated statement of comprehensive income

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Consolidated statement of financial position

CATALYST MEDIA GROUP PLC

Report and financial statements for the period ended 30 June 2011

Consolidated statement of cash flows