Sports Stars Media PLC : Interim Results

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24 September 2013

Sports Stars Media plc

("SSM" or the "Group")

Interim Results for the period ended 30 June 2013

Sports Stars Media plc, the AIM-quoted sports personality animation business, is pleased to announceitsresults for the six months ended 30 June2013.

Highlights

§ SSM completed on schedule and expanded the "Mourinho and Special Ones" property, including the animation series, the Trading Card Game ("TCG") and the Special Ones apps.

§ The Group raised ?875,000 through an issue of new ordinary shares to develop "The Game by Ronaldo" and is on target for launching on 29 October 2013.

§ The "Mourinho and Special Ones" series was successfully premiered on SIC on the 30 August 2013 and the TCG is being distributed by VASP and FNAC assuring retail presence in more than 2,000 points of sale.

§ The company's team is currently focused on negotiating and assuring successful launches of the "Mourinho and Special Ones" product line in further territories. 

Ruben Dias, CEO of SSM, commented:

"In the past 18 months the group was able to develop a solid and comprehensive "Mourinho and Special Ones" product line that was successfully launched in the first territory. We now have an immense revenue opportunity for worldwide expansion."

For further information, please contact:

Sports Stars Media plc         

Ruben Dias (Chief Executive Officer)                                        Tel: [phone]

Sanlam Securities UK Limited (Nominated Adviser and Broker) 

Lindsay Mair / Katie Shelton                                                    Tel: [phone]

Newgate Threadneedle (Financial PR)        

Josh Royston / Heather Armstrong                                            Tel: [phone]

CHIEF EXECUTIVE OFFICER'S STATEMENT

Overview

Sports Stars Media Plc has now been listed on AIM for eighteen months and the Group's strategic plan continues to expand by exploring new opportunities in the sports entertainment sector. 

As a Board, we aim for excellence in product design and product development and to be innovative in our funding: the Company was the first Portuguese business to be listed on AIM; we believe that, as well as enabling us to raise funds to develop our business, our listing has given the Company valuable exposure and credibility in its dealings with the international sportsmen who are now linked with the business.

On 2 January 2013, we announced that the Group had raised ?875,000 through an issue of new ordinary shares and entered into an agreement with Cristiano Ronaldo, one of football's most popular and valuable players. The announced "The Game by Ronaldo" is on target for launching on 29 October 2013, according to plan.

The Company has also established a new technical and creative center in Dubai through our subsidiary, Sports Stars Media FZ, attracting a talented and motivated team responsible for the development of the "The Game by Ronaldo" ("TGbR") and in support of our full product range.

The Mourinho and Special Ones ("MSO") product line was completed on time and on budget and the full product range has been launched as of this date. The product line was expanded and the announced strategic business model provides less dependability from broadcasters and related revenue streams.  

Financial overview

As expected given the early stage of development of its business, the Group made a loss before tax of ?228,491 for the period. This amount corresponds mostly to overheads.

Production costs incurred so far amount to approximately ?1,007,965, split between the operation in Portugal and Dubai, and have been capitalized as an intangible asset.

These costs consist mainly of payroll, hardware and software licences depreciation, production facilities and outsourced production services and support, for both projects, MSO and TGbR. Amortisation of MSO assets will be initiated in September, at the launch in Portugal of the commercialisation of the trading card game and associated products, and broadcasting of the series.

Cash in the bank at the period end was ?573,289.

Mourinho and the Special Ones ("MSO")

Television series

The first 26 episode series of MSO was finished in two versions, English and Portuguese, on budget and on schedule. The trailer for Mourinho and the Special Ones has been screened in part on the CBBC Match of The Day Kickabout programme and reached 130,000 views on YouTube in the first 5 days.

Launch

We have launched MSO in Portugal after the successful media deal agreement signed with the Portuguese TV channel SIC, announced on 28 May 2013 and securing two distribution partners for the Mourinho and Special Ones - Trading Card Game ("TCG"). These agreements are with the multi-national distributor FNAC group and the Portuguese based media distributor VASP. As this launch was effective on 30 August, the interim mid-term financial reports (to 30 June) do not reflect any revenues from this project.

The TCG, enhanced by the augmented reality experience, has been very well received by the media. Two MSO news clips were broadcast on the Portuguese TV evening news featuring the property uniqueness and product diversity. The reports showcased the series, TCG, Special Ones tablet and mobile app, the theme song and the innovative augmented reality football skills.  The Board is very satisfied with the considerable brand exposure during the first days of the launch.

The TCG advertising campaign is being aired by SIC. The agreement provides a substantial campaign of the 20 second TV spot that will represent 750 GRPs (gross rating points) that will be shown during the next six months. The product is currently present in more than 2,000 points of sale throughout the country, representing a retail value, excluding VAT, of ?500,000.

Next priorities and business opportunity

We have identified a list of territories that are our priority markets, based on: the number of individuals in our target audience (boys 6-12), football interest and Jose Mourinho's profile in the territory. These are:  UK, USA, France, Italy, Germany, Brazil, Mexico, Japan, Turkey, MEA, Sweden, Norway, South Korea, Argentina and Colombia, representing approximately 78 million individuals. Our objective is to enter three of these territories in the next 12 months.

The Game by Ronaldo

The Game is the first truly global crowd-sourced football championship, an entirely new concept that mixes real world football with an intelligent pairing algorithm for matches and a continuous league system for teams. Directly aimed at football players of all ranks who are ready to experience a truly revolutionary competition, the platform allows everyone to challenge and play against teams all over the world.

While The Game is a true championship where only the most skilled can rise to the top, it can also be a fantastic journey for those just willing to play for fun while experimenting with novel layers of engagement. It will be launched on 29 October 2013 and will be available through the Web and the two major mobile platforms: iOS and Android.

We have started the pre-marketing campaign with a series of engagement messages in social media platforms. At this date, even before launching, The Game has more than 50,000 Facebook fans (https://www.facebook.com/TheGameByRonaldo) and 12,000 Twitter followers (https://twitter.com/GAMEbyRonaldo).

A series of diverse marketing actions are planned before the launch date. This will increase the brand awareness and facilitate participant enrolment.

Outlook

The next key milestone for us is to start generating revenues from our products and the management team is working hard to achieve this.  We expect the next 18 months to be an exciting time for the business and the potential for worldwide sales success is supported by the personal following of our main sports personalities.

Our entry costs for different countries are low compared with traditional industry levels; however, we believe that the ongoing support of our existing and new shareholders together with our initial anticipated sales will enable expansion resulting in our products delivering significant revenues, earned globally.

I would like to take this opportunity to thank the Board, staff and stakeholders for their continued support during the period. As your Chief Executive Officer, I feel positive and excited about the months ahead.

Ruben Dias

Chief Executive Officer

UNAUDITED CONSOLIDATED INCOME STATEMENT

Period from 1 January 2013 to 30 June 2013

	Notes	Period to 30.06.13	Period to 30.06.12
		?	?
REVENUE		2,112	21,050
Cost of sales		(21,703)	(16,840)
		_________	_________
GROSS (LOSS) / PROFIT		(19,591)	4,210
Administrative expenses		(212,365)	(113,947)
Admission expenses		-	(134,105)
		_________	_________
OPERATING LOSS		(231,956)	(243,842)
Finance revenue		8,042	10,361
Finance costs		(4,577)	(607)
		_________	_________
LOSS BEFORE INCOME TAX		(228,491)	(234,088)
Income tax expense		-	-
		_________	_________
LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS		(228,491)	(234,088)
		_________	_________
LOSS ATTRIBUTABLE TO OWNERS OF THE PARENT		(228,491)	(234,088)
		_________	_________
Loss per share from continuing operations attributable to the equity holders of the company during the period	2	? ( 0.001)	? ( 0.001)
		_________	_________

Period from 1 January 2013 to 30 June 2013

Notes	Period to 30.06.13		Period to 30.06.12
Comprehensive income
Loss for the period	(228,491)		(234,088)
	_______		_______
Other comprehensive income
Currency translation differences	106,830		(70,116)
	_______		_______
Total comprehensive income for the period attributable to owners of the parent	(121,661)		(304,204)
	________		________

As at 30 June 2013

	Notes	At 30.06.13	At 31.12.12
		?	?
ASSETS
Non-current assets
Intangible fixed assets Tangible fixed assets	3	1,007,965 121,251	558,432 111,424
		_______	_______
		1,129,216	669,856
Current assets
Trade and other receivables		364,144	244,712
Cash and cash equivalents		573,289	1,396,205
		_______	_______
		937,433	1,640,917
		________	________
TOTAL ASSETS		2,066,649	2,310,773
		________	________
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Ordinary shares	4	151,287	132,116
Share premium account		2,281,034	1,562,172
Accumulated losses		(577,257)	(422,395)
		________	________
Total equity		1,855,064	1,271,893
		_______	_______
Liabilities
Current liabilities Trade and other payables		136,794	1,038,880
Taxes		5,020	-
Other creditors Accruals and deferrals		52,667 17,104	- -
		________	________
Total liabilities		211,585	1,038,880
		________	________
TOTAL EQUITY AND LIABILITIES		2,066,649	2,310,773
		________	________

UNAUDITED CONSOLIDATEDSTATEMENT OF CHANGES IN EQUITY

Period from 1 January 2013 to 30 June 2013

		Accumulated losses 30.06.13	Accumulated losses 30.06.12
		?	?
At beginning of period		(422,395)	(10,888)
Loss for the period from continuing operations		(228,491)	(234,088)
Other comprehensive income		106,830	(70,116)
Translation of period end balances		(33,201)	(2,057)
		________	________
At end of period		(577,257)	(317,149)
		________	________

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

Period from 1 January 2013 to 30 June 2013

		Period to 30.06.13	Period to 30.06.12
		?	?
Cash flow from operating activities
Cash used by operations		(1,178,683)	(438,025)
Cash flows from investing activities
Purchases of property, plant and equipment		(35,390)	(135,132)
Purchase of intangibles		(423,970)	(150,809)
		________	________
Net cash used in investing activities		(459,360)	(285,941)
		________	________
Cash flows from financing activities
Proceeds from issue of ordinary shares		812,168	2,063,406
Share issue costs paid on account		-	(340,736)
Interest received Interest paid		8,042 (4,577)	10,361 (607)
		________	________
Net cash generated from financing activities		815,633	1,732,424
		________	________
Net increase in cash & cash equivalents Exchange losses on cash and cash equivalents Cash & cash equivalents brought forward		(822,410) (506) 1,396,205	1,008,458 (72,170) -
		________	________
Cash & cash equivalents at end of the period		573,289	936,288
		________	________

1.Basis of Preparation

These interim consolidated financial statements are for the period from 1 January 2013 to 30 June 2013. They do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

These consolidated interim financial statements have been prepared in accordance with the same accounting policies applied by the company in its financial statements as at and for the year ended 31 December 2012. These accounting policies are based on the recognition and measurement principles of IFRS as adopted by the European Union. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements and are expected to be followed throughout the period to 31 December 2013.

2. Loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period.

Group			?
Loss attributable to equity holders of the Company			(121,661)
			________
Weighted average number of Ordinary Shares in issue (thousands)			428,546,884
			________
	3. Intangible assets

Intangible fixed assets are initially recognised at cost, which includes payroll, hardware and software licenses depreciation, production facilities and outsourced production services and support. Amortisation will be charged once the commercialisation of the series, trading card game and associated products commences.

4.	Share capital	Number of shares	Nominal value
			?
	Issued and fully paid	431,313,342	151,287
	Ordinary shares of 0.03 pence each	===========	=======

On 8 January 2013, 71,137,500 new ordinary shares were issued at a subscription price of 1p each.

Share options and warrants

At 30 June 2013, the following options and warrants were in issue:       

	Exercise Price (pence)	Expiry date	Options in issue
	Options 1p	13 February 2015	36,000,000
	Options 1p	16 February 2015	5,250,000
	Warrants 1p	13 February 2017	243,670,090
			-------------------
			284,920,090
			=========

5. Availability of Interim Report

This information is provided by RNS

The company news service from the London Stock Exchange

ENDIR SEAFMDFDSEEU