German media company Constantin Medien has said the path is clear for it to focus on the sports market after unveiling financial results marked by a period of upheaval at the firm.
For the 2017 financial year, Constantin said that group sales fell by 53.4 per cent to €263.8m ($325.3m), but stressed that this figure was well within the target forecast range of €250m to €280m.
Profit from operations (EBIT) of €36.7m was only slightly below the previous year's figure of €39.5m due to the non-recurring, non-cash effects amid the deconsolidation process, namely that profit contributions not appearing in the previous year were more or less offset by non-recurring income of €38.3m from the deconsolidation of Highlight Communications.
The financial result improved considerably to a loss of €5.3m versus the 2016 loss of €18.9m. For the sports division, sales amounted to €139.1m, 13.4 per cent down on the previous year. Constantin said this was mainly due to the effects of the end of a production deal between Plazamedia and pay-television broadcaster Sky in June, which meant the new customer business of Plazamedia was behind expectations and could not compensate for that loss.
For 2018, Constantin warned that it is expecting significantly lower sales at the group level than in previous years due to the year-round deconsolidation of Highlight Communications. Based on current estimates and the operational development of the sports companies, Constantin is projecting group sales of €110m to €130m for the 2018 financial year.
Olaf Schröder, chief executive of Constantin Medien, said: “With our combined efforts in the last few months of the past financial year, we managed to secure the going concern of the Constantin Medien Group and to get our corporation back on course for operative growth.
“Within a few months we cleared away the stumbling blocks and successfully resumed our strategy for a sports-focused enterprise. We secured our group financing, reduced finance costs, ended costly legal disputes, streamlined the group, and cleared its debts. But all these positive results don’t hide the fact that we still have a long way to go. We spent too long following a zigzag strategy.”
Highlight Communications, backed by Lucerne-based Studhalter Investment, secured a majority stake in Constantin Medien last month.
Highlight and Studhalter acquired nearly 10 per cent of the company through a so-called “acceptance period” that was offered to remaining shareholders and concluded on February 5.
The acceptance period was launched after Highlight, which already controlled just under 30 per cent of Constantin, struck a deal to snap up a further 38.44 per cent of the company through the Studhalter partnership.
Following the acceptance period, Highlight and Studhalter control more than 78 per cent of Constantin. Constantin owns German sports broadcaster Sport1 and the Sport1 Media advertising sales division.
Highlight controls Team Marketing, which has a long-term agreement with Uefa, football's European governing body, under which it serves as the exclusive agency for the global marketing of commercial rights relating to the Champions League, Europa League and Super Cup club competitions.