30th Nov 2015 10:59
LONDON (Alliance News) - Catalyst Media Group PLC on Monday said it swung to a pretax profit in the last financial year after its primary investment reported a large rise in earnings, but warned its main portfolio company is going through changes which is currently draining profit.
Catalyst Media's main asset is its 20.5% interest in Satellite Information Services (Holdings) Ltd, a company which provides live and virtual horse and greyhound racing to bookmakers.
Catalyst Media said Satellite Information Services doubled its pretax profit in its last financial year, boosting its own results. However, Catalyst Media warned things might not be so positive in the current financial year.
In the financial year ended June 30, Catalyst Media reported a GBP1.4 million pretax profit after swinging from a GBP3.0 million loss a year earlier after its share of Satellite Information Service's profit rose to GBP4.4 million from only GBP1.3 million a year ago.
That GBP4.4 million share of profit in the financial year was partially offset by impairments totalling GBP2.8 million in the year. A year earlier, Catalyst Media booked impairments totalling GBP4.2 million.
Catalyst Media Group's profit came after Satellite Information Services doubled its pretax profit in the year ended March 31 to GBP26.4 million from only GBP12.0 million a year earlier despite revenue falling to GBP229.0 million from GBP253.4 million.
Satellite Information Services saw revenue from its Betting Services division rise by GBP9.1 million in the last financial year, which was offset by revenue from its LIVE Services division falling by GBP33.9 million.
Moving forward, Catalyst Media Group said it expects Satellite Information Services to generate revenues of a "similar magnitude" in the current financial year, but said operating profit will fall due to Satellite Information Service restructuring its betting business "to a more efficient model", its diversification into the digital sector which is a "drain on profits at this stage", and a reduced contribution from Satellite Information Services' joint ventures after it divested some of its interests in those ventures back in August.
"Satellite Information Services remains profitable and cash generative in the immediate term and is planning the necessary steps, albeit in a challenging environment, to ensure the future profitability of the business. Current trading is in line with Satellite Information Services' management expectations," said Catalyst Media Group.
"Catalyst Media Group continues to operate at a low overhead cost. Pending the receipt of any dividends from Satellite Information Services, the board has made arrangements to ensure sufficient funds are available to meet those costs," it added.
Catalyst Media Group shares were up 1.6% to 65.50 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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