7th Feb 2008 14:31
Sport Media Group PLC07 February 2008 Press Release 7 February 2008 SPORT MEDIA GROUP PLC ("Sport Media", "SPMG", "the Group" or "the Company") Trading Update Board Appointment Notice of Results Sport Media Group plc (AIM: SPMG.L), the integrated multi-media group thatpublishes the Sunday and Daily Sport newspapers and digital content for internetand mobile channels, is pleased to provide the following trading update ahead ofits interim results for the six months ended 31 January 2008. Highlights: • Group comfortable that profit for the year ending 31 July 2008 will be in line with market expectations • Committed to stated dividend policy for the full year • Increased retailer coverage to over 39,000 outlets (up from 37,000 at the time of the acquisition of The Sport) • Reduced wastage levels as a result of new distribution practices • Appointment of high profile London advertising agency to drive advertising revenues • Increased advertising yields • Appointment of Andrew Fickling as Group Chief Executive Officer • John Maddock appointed non-executive Director The Board believes that it has arrested the decline in circulation at The SportNewspaper and expects circulation to increase in the second half of the year asa result of a number of measures taken, as detailed below. The Board is pleasedwith the progress made to date including: • the appointment of a London advertising agency; • an increase in the number of retailers that stock The Sport titles; • increased advertising yield; and • reduced wastage levels and costs. Interactive World continues to perform well and to consolidate its UK positionwhilst exploring possible overseas opportunities. Whilst, as in previous years, trading in the second half of the year is expectedto account for a disproportionate part of the results for the full year, theBoard remains comfortable that the Group will meet profit expectations for thefull year. We have slowed down our plans for overseas expansion in InteractiveWorld (which we expected to generate lower margins than our UK business) andwhilst we expect our turnover to be less than previously expected, significantimprovement has been made to the cost base. As such, we also remain committedto our stated dividend policy. Andrew Fickling, newly appointed Chief Executive Officer of Sport Media Group,said: "Just a small increase in the circulation of the Daily Sport and SundaySport will deliver a significant increase in profits which means it's going tobe a busy and exciting second half of the year for us. The extensive experienceof the team we are building, in national and local newspapers and in magazinestargeted at a male audience, is key to generating circulation uplift as wedevelop The Sport into the only paper for men." Sport Newspapers The Group continues to make solid progress with regard to the turnaround ofSport Newspapers. As previously announced, we have seen an increase in advertising yields of 10%,which we expect to enhance further with the appointment of Wardour Publishingand Design as our London advertising sales agency on 28 January 2008. Wardouris a leading media agency based in London's Regent Street, working with clientssuch as ITV, Camelot and Unilever. Wardour will provide London representationin order to increase mainstream advertising in the newspapers. Despite the period since acquisition including two of the seasonally slowesttrading months, being December and January, exacerbated by a long Christmasbreak, we believe we have arrested the decline in circulation. We are committedto aggressively increasing the circulation in the second half of the yearthrough a combination of measures which we have already identified as being: • Refocusing of the editorial direction to provide greater prominence to humour and entertainment; • Increased breadth and analysis of sport coverage; and • Zoning of niche advertising into specific areas of the newspaper. The Group's publications are now sold in approximately 39,000 retailers acrossthe UK and Ireland including branches of WH Smith Travel, the division of WHSmith plc responsible for outlets at airports, train stations and motorwayservice areas, where work is now underway to remove shrouding of the title ontheir news stands. We are also pleased to report that as of January 2008, The Daily Sport will beaudited by the Audit Bureau of Circulation (ABC). It is the Group's intentionto report circulation on a quarterly basis, starting with the Sport MediaGroup's interim results. The Group has also been focussing on improved cost control and we have appointedJon Dyer as Circulation Director. Waste levels have materially improved and arenow consistently below 50%, down from the 58% level seen prior to theacquisition, and this trend is expected to accelerate over the coming months.Jon has experience at wholesale, national and regional publisher levels,including two years as Deputy Circulation Manager at The Sun and News of theWorld, accumulating in over 18 years experience at a senior level in his field. Board Appointments The Group is pleased to announce the appointment of Andrew Fickling as ChiefExecutive Officer of the Group with immediate effect. Andrew, who is currentlyan Executive Director of the Group and Managing Director of the Sport, has ledthe strategic turnaround of The Sport titles. In addition, John Maddock has been appointed to the Board as a non-executivedirector with immediate effect. In his extensive career, John held seniorexecutive positions from Sports Editor to Managing Editor with the Daily Mirror,The People, and the Daily and Sunday Express in Manchester and London. Heworked as a consultant between 1994 and 2006, culminating in the role of GroupManaging Editor at Northern & Shell plc of the Daily and Sunday Express, DailyStar and Daily Star Sunday, OK!, New and Star magazines. Pursuant to Rule 17 of the AIM Rules, John Malcolm Maddock, aged 65, is adirector of Maddock Communications Limited; other than this he is not, and hasnot been, a director or partner of any other companies or partnerships at anytime in the past five years. There is nothing further to disclose underSchedule Two, paragraph (g), of the AIM Rules. He holds no shares or options inthe Company. The Group is hoping to appoint an additional non-executive director in thecoming months to further strengthen the Board. An external candidate has beenidentified and an announcement will be made, as appropriate, in due course. Other Appointments The turnaround of The Sport is dependent upon the quality of the management teamand, since the reversal and readmission of the Group to AIM on 5 September 2007,the Group has made a number of significant appointments in this regard. Barry McIlheney was appointed as Editor-in-Chief on 14 January 2008 to lead theeditorial team of Sport Newspapers. Barry's 21 year career at Emap plcculminated in his leadership over the launches of well-known publications thatinclude FHM and Zoo. The Group appointed Jill Britton of Britton McGrath Associates on 21 November2007 on a fixed term contract to co-ordinate and develop a marketing strategyfor the titles. Jill has held a number of senior marketing positions across anumber of industries culminating in a main Board position at The Tussauds GroupLtd, now a part of Merlin Entertainments Group Ltd, as the Executive Directorresponsible for brands and strategy during the management buyout in 1998. Interim Results The Group is intending to announce its interim results for the six months ended31 January 2008 on 21 April 2008. For further information, please contact: Sport Media Group plcAndrew Fickling, Chief Executive Officer Tel: +44 (0) 161 236 4466Andrew Fletcher, Chief Financial Officer Tel: + 44 (0) 20 8507 6920 www.sportmediagroup.co.ukDaniel Stewart & Company plc Tel: +44 (0) 20 7776 6550Simon Leathers / Katie Shelton www.danielstewart.co.ukAbchurch Communications Tel: +44 (0) 20 7398 7700Chris Lane / Gareth Mead www.abchurch-group.com Notes to Editors: Formed by a reverse takeover of Sport Newspapers Limited by Interactive Worldplc, SPMG combines an established national newspaper brand with recognisedexperience in the delivery of content through digital channels, including bothbroadband and mobile. Through integrating traditional print with new media digital content, SPMG'sstrategy is to expand its target audiences beyond its current loyal readershipand users. The Group will also build upon the brand to attract a more diverseaudience thereby attracting a broader base of significant advertisers. Theintegration also provides significant cross selling and marketing opportunities. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
SPMG.L