Sport Media Group’s shares suspended
SPORT Media Group, the Manchester-based publisher of the Daily Sport and Sunday Sport newspapers, has announced this morning that its shares have been suspended “pending clarification of the company’s financial position”.
A statement issued by the company this morning said that it had experienced “an insufficient recovery in trading since the adverse weather in December, with consequential pressure on the company’s working capital position”.
“This has led to uncertainty around ongoing support from its bankers. The Company is working with the bank to resolve these issues and will update the market as soon as practicable.”
Sport Media also announced that executive director Robert Jonhson has resigned from the group’s board “with immediate effect” to concentrate his efforts on the operational side of its digital division.
The firm has been labouring under a debt burden incurred as part of the £50m reverse takeover by mobile content firm Interactive World which gave Sport Media Group its stockmarket listing in 2007.
Founder David Sullivan helped to rescue the business in May 2009 through his subscription to a new share issue and the company has completed a major restructuring exercise since, with chief executive Andrew Fickling initially embarking on a major cost-cutting exercise before attempting to diversify by broadening revenue streams.
It also agreed a six-month deal to defer repayments to its main lender, Royal Bank of Scotland, in September to ease pressure on working capital.
Interim results for the six months to June 30 showed that it had moved back towards profitability after declaring an operating profit of £838,000 and in a pre-close trading update issued last month the firm said that it expected earnings before interest, tax, depreciation and amortisation (ebitda) for 2010 to hit £1m, largely as a result of improving conditions in its telecoms and digital businesses.
The company is expected to publish its full-year results for 2010 this month.