Sport Media alarmed the stockmarket yesterday when it revealed it was in breach of one of its banking covenants and had not yet secured a revised debt facility, sending its share price down from 10.75p on Tuesday to as low as 5.25p before closing yesterday at 9p.
This morning its shares opened at 6.64p after the company revealed that it had generated pre-tax profits of £6m in the year to July 31 2008.
After taking into account exceptional costs and a £20.7m charge on the impairment of assets this became an £18.1m loss.
This included a charge of £18.4m in the goodwill on the acquisition of Sport Newspapers, around a third of the £50m it paid in autumn 2007 for the company.
The company claimed it remained profitable, but has decided not to pay a final dividend. It was also downbeat about current trading, describing the period to October as broadly in line with management's expectations but the period since as challenging.
It said its operating forecasts for the full year were currently under review due to the uncertainty surrounding its sources of finance.
It is also planning to announce its next financial results on December 31, 2009, by moving its year-end back by five months.
The Daily Sport was relaunched in April 2008, but did not have a positive impact on circulation, which has fallen from above 100,000 before the acquisition to around 75,000 now.
Sport Media Group is looking to secure a new financing source before its current loan facility expires on March 6.
.jpg)
.jpg)