SWD Sportsworld

RNS Number:5632Q
Sportsworld Media Group PLC
28 January 2002

28 January 2002


                           SPORTSWORLD MEDA GROUP PLC

                                 TRADING UPDATE


In the light of the most recent trading information it has received, the Board
of Sportsworld Media Group Plc announces that it does not expect to meet the
current published consensus expectations of profit for the year ending 30th June
2002.  The view of the Board, based on the experience of the first half referred
to below, is that trading profit (before amortisation of goodwill) for the full
year is more likely to be in the range of between £9M and £10M.



The Group had always expected that the results for the current financial year
would be more biased towards the second half than in previous years.  However,
the delays in sponsorship income and the effects of the other factors mentioned
below mean that this bias will be significantly greater than originally
anticipated and the Group expects to show a trading loss for the first half,
before goodwill amortisation, of approximately £2M.



It has become apparent over the last couple of months that trading conditions in
the Group's core sponsorship market have become tougher.  Large corporations
with whom the Group is discussing significant sponsorship packages are taking
longer than had been anticipated to reach decisions.  This has a consequential
impact on the timing of revenue recognition.  Although the Group expects to
conclude a number of these arrangements over the forthcoming months, these
delays have had an impact on the first half performance.



In addition, the Group's business in the first six months of this financial year
was different from that in the comparable period last year.  In particular, last
year the Group had the benefit of significant profits derived from a non-core
business that was disposed of at the end of that period.



During the first half of the current financial year the Group has invested in
several new business areas, for which it has incurred staff and other related
costs and which have yet to generate significant income, but which are expected
to start to contribute in the second half.  The Group has also invested in both
staff and systems in its existing business as it brings together the separate
Sportsworld companies into a worldwide group with the capability to service
international brand marketing spend.



The Group has continued to invest in its library of sports and other
programming.  One consequence of this is increased depreciation charges, but
based on a prudent write off period of between three and five years.



The Group has produced positive EBITDA of approximately £1.4m in the first half.
  The Group's balance sheet remains strong, with cash of £42M at 31st December,
of which £37M is held in a blocked deposit to fund business purchase commitments
and £5M is available to the Group for working capital and future investment.



The Group expects to return to significant profitability in the second half of
the year through a combination of renewed sponsorship activities by its
customers and a number of significant initiatives in sports and related areas
including such major sporting events as the forthcoming Winter Olympics and the
Football World Cup.  In addition TV programming revenues will continue to grow.



Commenting, Chief Executive Geoff Brown said



"There is now no doubt that we face tougher market conditions this year.
Indeed, although our initial view during the last quarter of last year was that
we were less affected, we know now that this is not the case.  In over twenty
years of working in the sponsorship and advertising markets, I have never seen
such a dramatic slowdown in sponsorship spend as over the last couple of months.




We expect to recover some of this ground in the second half.  Looking forward,
we expect pure third party sponsorship deals to play a less important part in
our business model, certainly over the short term.  We will review our costs
accordingly.



We remain excited by the initiatives that will start to come through in the
second half and continue in subsequent periods.  We have put in place the
products and services to offer innovative sports and media solutions to national
and international brands seeking focussed marketing spend.  We believe that the
Sportsworld business model is a sound one which will clearly benefit from
improvements in market conditions and that future results will demonstrate 
this."



The Group expects to announce its results for the six month period to 31st
December 2001 on 27th February.





                                -         ENDS -

Enquiries:


Geoff Brown, Chief Executive
Malcolm Gardner, Group Finance Director
Sportsworld Media Group                                           020 7240 9626

Tim Spratt, Director                                     
Financial Dynamics                                                020 7831 3113









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