Final Results for the year ended 31 December 2016

Ultimate Sports Group Plc, the AIM listed investment vehicle, is pleased to announce its results for the year ended 31 December 2016.

Chairman's Statement and Chief Executive's Review

For the year ended 31st December 2016, we are reporting an operating loss before adjusted items of £287,433 (2015: loss before adjusted items £259,830).

These figures exclude website development costs and amortisation of £141,763 for 2016 and £71,813 in the previous year.

Additionally and as a result of terminating our small-sided football league activities, the results exclude non-recurring losses of £158,747 in 2016 and £77,436 in the previous year.

USG's net cash balances at 31st December 2016 were £129,437 (2015: £357,915).  The Directors are not recommending the payment of a dividend.

 

Share Placing

In June 2016, USG issued 5 million new Ordinary shares at 10p per share to raise £500,000 before expenses.  Following the share placing and allotments during the year, the Company had 20,486,638 Ordinary shares in issue at 31 December 2016. Since the year end, the Company has raised £212,500 before expenses through a placing of 2,125,000 shares at 10p per share.

Ultimate Player.me/p>

UltimatePlayer.me is a new digital platform that increases the participation and enjoyment of children in school sports.

The platform is operating as a Freemium business model - aiming to achieve web scale of free users with a percentage encouraged to subscribe as members.

Given that the platform is built to be used by coaches with children it has a complex set of users to satisfy and there have been a number of challenges successfully dealt with:

·     Coaches must be motivated to use the platform (for free) with their classes

·     Parents must be comfortable to allow their children to join the platform, and help their children engage with it, ultimately getting enough value to purchase memberships and products

·     Children must be excited enough about the platform to want to log in regularly and to participate in the platform

We have successfully dealt with the challenges because the young players embrace it.  In our experience when a coach uses the platform with a class, their players are excited to participate.  They change their behaviour in the classes, wanting to develop a wider range of skills and ultimately they participate in more classes.  They are excited by awards and actively engage with their parents in the evenings to check their results.

Equally, we have found that the early adopter coaches are enthusiastic about the platform and we have feedback on what it has achieved for them.

We have also had very positive feedback from parents.  They value awards, and the increased interest of their children in the sports that they are participating in.  Over 50% of parents activate their children on the platform once invited.  Parents are also needed to help their children log on to the site in the evenings, and are doing so in high numbers.

The traction that the platform has gained with both children and parents, has led to10% of active players over a 3 month period purchasing memberships.

We have also demonstrated that parents are happy to purchase UltimatePlayer.me merchandise.

We believe that the dynamics of the platform are functioning as planned: coaches are signing up, inviting children who are participating and their parents are spending on memberships and merchandise.

The cost of development to date is represented by the investment we have made of £729,157.

The pilot for Ultimate Player, which is currently being used by a number of coaches and children, has indicated very positive results. The board is now exploring avenues to exploit it. 

Pantheon Leisure Plc ("Pantheon")

USG holds 85.87% of the issued share capital of Pantheon which in turn owns 100% of the operating business of Pantheon's Sport and Leisure division.

Pantheon's Sport and Leisure division comprises two trading companies, Sport in Schools Limited ("ESS") also known as The Elms Sport in Schools and Football Partners Limited ("FPL") also known as The Elms Small Sided football.

The business of FPL was sold in November 2016 to Powerplay Team Sports Limited, a company operating in the same sector for a consideration of up to £100,000 with cash payable on deferred terms and subject to certain conditions.  Those conditions have now been fulfilled and £82,500 has been received with a further final payment of £17,500 due in October 2017.

Pantheon trading companies made a trading loss of £36,212 before exceptional items for the year (2015: Profit £67,243).

On a turnover of £1,246,888 (2015: £1,243,011), ESS has contributed divisional profit (before exceptional item) of £122,535 as compared with £144,679 to 31 December 2015.

ESS specialises in the delivery of primary school sport - covering the National Curriculum during the day and The Extended Day before and after school hours (breakfast, lunchtime and after-school clubs).

The majority of the breakfast and lunchtime clubs are provided and paid for by the school, whilst the majority of after-school clubs are paid for by the parents.

Holiday camps are a successful area for ESS where it provides sports tuition during the school holidays.  The majority of the camps are paid for by parents, whilst a few are paid for by the school.

The ESS directors have developed bespoke skill sets which have been adopted with great enthusiasm by its full time staff and part time coaches.  On average, some 20,000 children are coached between 12 to 25 hours a week.  All its coaches are highly qualified (minimum level 2), DBS checked, child protection vetted and rigorously trained by ESS in all the main disciplines required by the National Curriculum.  The management of ESS constantly monitors and assesses the level of performance of its coaches throughout the school year.

Outlook

The continuing success of the sports tuition activities of ESS is encouraging and the directors consider that together with the gradual acceptance of the Ultimate Player.me website, there is potential for growth.

We look forward to updating shareholders on progress.

Notice of Annual General Meeting

The Annual General Meeting of the Company in respect of the year ended 31 December 2016 will be

held at the Hellenic Centre, 16/18 Paddington Street, London W1U 5AS on 30 August 2017 at 11:00 am.

R.L. Owen

G.M. Simmonds


Consolidated statement of comprehensive income for the year ended 31 December 2016

General

A copy of the report and accounts are being posted to shareholders today and will be available on the Company's website www.ultimatesportsgroup.me later today.


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