CORPORATE INFORMATION
1. Corporate
Information
Live Company Group (LVCG) plc is a
live events and entertainment group, limited by shares registered
in England Wales. The company's registered number and registered
office are disclosed on the information page of the financial
statements.
The company's active subsidiaries
Bright Bricks Limited, Brick Live Group Limited, Brick Live
International Limited, Live Company Group EBT Limited, Start Art
Global Limited, Start Art (2013) Limited, KPOP Lux Limited,
and Parallel Live Group Limited are exempt from the requirements of
the Companies Act 2006 relating to the audit of their individual
accounts by virtue of section 479A of the Companies Act
2006.
2. Basis of
Preparation
These financial statements have
been prepared on the historical cost basis where required and in
accordance with International Financial Reporting Standards as
adopted in the United Kingdom ("UK adopted IFRS"), and with those
parts of the Companies Act 2006 applicable to companies reporting
under UK adopted IFRS as at 31 December 2022.
The preparation of financial
statements in conformity with UK adopted IFRS requires management
to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial
statements which are disclosed in Note 3 to these consolidated
financial statements.
The functional currency of the
parent Company is UK Pounds sterling ('GBP'). These consolidated
financial statements are presented GBP, rounded to the nearest
thousand which may lead to some rounding issue
discrepancies.
2.1 Going Concern
These financial statements have
been prepared on a going concern basis. The Consolidated Statement
of Comprehensive Income shows a loss of £9,664,000 for the year
ended 31 December 2022 (2021: £2,645,000 loss as restated). The
Consolidated Statement of Financial Position shows net current
liabilities of £3,221,000 (2021: £66,000 as restated).
After considering the monthly cash
flow projections, and the facilities available to the Group and
Company outlined within the directors
report, the Directors have a reasonable expectation that the Group
and Company will secure the additional £1.5m loan facility and
£500k placing agreement, described in the Chairman's statement on
page 8, enabling them to meet their existing obligations with the
added support of the guarantee from the majority shareholder to 31
January 2025. Accordingly, and having reassessed the principal
risks and uncertainties, the Directors considered it appropriate to
adopt the going concern basis in preparing the Group and Company
financial statements. However there remains a material uncertainty
related to events or conditions, that may cast significant doubt on
the Group's and Company's ability to continue as a going concern.
This is due to the Group's current and recent trading performance
and the remaining uncertainty relating to the proposed loan of
£1,500,000 from the new cornerstone investor and £500,000 placing
agreement disclosed within the Chairman's statement on page
8.
2.2 Adoption of standards effective
in 2022
The following new and revised
Standards and Interpretations have been issued and are effective
for the current financial period of the Company but had no impact
on the results or net assets:
·
COVID-19 Related Rent Concessions (Amendment to
IFRS 16).
2.3 IFRS in issue but not applied in
the current financial statements
The following IFRS and IFRIC
Interpretations have been issued but have not been applied by the
Company in preparing these financial statements as they are not as
yet effective. The Company intends to adopt these Standards and
Interpretations when they become effective, rather than adopt them
early.
The following amendments are
effective for the period beginning 1 January 2023:
·
Disclosure of Accounting Policies (Amendments to
IAS 1 and IFRS Practice Statement 2);
·
Definition of Accounting Estimates (Amendments to
IAS 8); and
·
Deferred Tax Related to Assets and Liabilities
arising from a Single Transaction (Amendments to IAS
12).
·
Supplier Finance Arrangements - Amendments to
IAS7 and IFRS 7
The following amendments are
effective for the period beginning 1 January 2024;
·
IFRS 16 Leases (Amendment - Liability in a sale
and leaseback);
·
IAS 1 Presentation of Financial Statements
(Amendment - Classification of Liabilities as Current or
Non-Current); and
·
IAS 1 Presentation of Financial Statements
(Amendment - Non-Current liabilities and covenants).
The directors do not expect that
the adoption the Standards listed above will have a material impact
on the Company in future periods.
A number of IFRS and IFRIC
Interpretations are also currently in issue which are not relevant
for the Company's activities and which have not therefore been
adopted in preparing these financial statements.
Other new and amended Standards
and Interpretations issued by the IASB that will apply for the
first time in the next annual financial statements are not expected
to impact the Company as they are either not relevant to the
Company's activities or require accounting which is consistent with
the Company's current accounting policies.
3. Significant Accounting
Policies
3.1. Basis of
Consolidation
An investor controls an
investee when it is exposed, or has rights, to variable returns
from its involvement with the investee and has the ability to
affect those returns through its power over the investee.
In such situations the investee company is a subsidiary
undertaking.
The consolidated financial
statements incorporate the financial statements of Live Company
Group ("LVCG") the company and entities controlled by the company
and its subsidiaries.
· Brick Live Group Limited ('Brick Live Group'), Parallel Live
Group Limited ('Parallel Live Group'), Bright Bricks Limited
('Bright Bricks Group'), Live Company Sports and Entertainment
Limited ('LCSE'), E Movement Holdings Ltd ('EMHL'),
Start Art Global Limited ('StART.Art'), KPop Lux
Limited ('KPL'), Live Company Group EBT
Limited ('EBT') and their subsidiary companies for the year ended
31 December 2022.
· The Group's financial statements consolidate those of the
parent company and all of its subsidiaries at 31 December
2022. All subsidiaries have a reporting date of 31
December.
·
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. The Group attributes
total comprehensive income or loss of subsidiaries between the
owners of the parent and the non-controlling interests based on
their respective ownership interests.
Business combinations
The information contained in this
note sets out how the Group typically accounts for Business
Combinations, which is effectively using the acquisition method
explained in IFRS 3, 'Business Combinations'.
The Group applies the acquisition
method in accounting for business combinations. The consideration
transferred by the Group to obtain control of a subsidiary is
calculated as the sum of the acquisition-date fair values of assets
transferred, liabilities incurred and the equity interests issued
by the Group, which includes the fair value of any asset or
liability arising from a contingent consideration arrangement.
Acquisition costs are expensed as incurred.
If the Group acquires a
controlling interest in a business in which it previously held an
equity interest, that equity interest is remeasured to fair value
at the acquisition date with any resulting gain or loss recognised
in profit or loss or other comprehensive income, as
appropriate.
Consideration transferred as part
of a business combination does not include amounts related to the
settlement of pre-existing relationships. The gain or loss on the
settlement of any pre-existing relationship is recognised in profit
or loss.
Assets acquired and liabilities
assumed are measured at their acquisition-date fair
values.
Management uses various valuation
techniques when determining the fair values of certain assets and
liabilities acquired in a business combination. In particular, the
fair value of contingent consideration is dependent on the outcome
of many variables including the acquirees' future
profitability.
Start Art Global Limited ('StART.Art')
Following the acquisition of the
remaining 80.06% of StART.Art in July 2022, the results of
StART.Art have been consolidated in accordance with
IFRS3.
Goodwill
Goodwill is recorded as an
intangible asset and is the surplus of the cost of acquisition over
the fair value of identifiable net assets acquired.
Goodwill acquired in a business
combination is, from the acquisition date, allocated to either an
acquired or existing cash generating unit ('CGU'), being the
smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other assets
or groups of assets. Significant judgement is required in
identifying a group of assets that comprise a CGU and in allocating
goodwill acquired in a business combination to the CGU expected to
benefit from the combination, which may differ from the CGU to
which the assets and liabilities of the acquiree are
allocated.
A cash-generating unit to which
goodwill has been allocated is tested for impairment annually, and
whenever there is an indication that the unit may be impaired, by
comparing the carrying amount of the unit, including the goodwill,
with the recoverable amount of the unit.
Where the carrying amount goodwill
allocated to a CGU exceeds its recoverable amount, the asset, or
CGU, is considered impaired and is written down to its recoverable
amount, with the impairment charged to the
Statement of Profit or Loss and Other Comprehensive Income.
A goodwill impairment charge is never reversed in
future periods.
The Group bases its impairment
calculation on detailed budgets and forecasts, which are prepared
separately for each of the Group's CGUs to which the individual
assets are allocated. These budgets and forecasts generally cover
the forecasted life of the CGUs. Sensitivity analysis was also used
to stress test these budgets and forecasts under certain downside
scenarios to ensure that sufficient headroom would
remain.
Where goodwill forms a part of a
cash-generating unit and part of the operation within that unit is
disposed of, the goodwill associated with the operation disposed of
is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill
disposed of in these circumstances is measured based on the
relative values of the operation disposed of and the portion of the
cash-generating unit until retained.
Formal impairment reviews were
completed at 31 December 2021 and 31 December 2022 given the
indicators of impairment existing at both dates.
3.2. Intangible assets
Externally acquired intangible
assets are initially recognised at their cost. Intangible assets
recognised in a business combination are recognised initially at
fair value which becomes their subsequent cost for the purposes of
amortisation and impairment.
The carrying amount of the Group's
intangible assets is their cost less accumulated amortisation and
impairment. Amortisation commences when the intangible asset is
ready for its intended use, and amortisation ceases on the earlier
of the intangible asset being classified as held for sale, or on
its disposal.
Trademarks are registered in each
of the geographical territories for the BRICKLIVE brand. Trademarks
are amortised on a straight-line basis over their estimated useful
lives, which is on average 10 years.
Contracts acquired and novated to
LCSE, as described in note 16, are amortised over the period of the
rights acquired, being the period over
which control over the legal rights exists, including any
additional periods. where the Group has the unconditional option to
extend such agreements and it expects to do so.
The value of the online platform
acquired as part of the StART.Art Group acquisition, is initially
measured at its fair value at the acquisition date. The fair value
is determined based on independent valuations and market
considerations, taking into account the specific attributes and
potential future benefits of the online platform. After initial
recognition, the online platform is measured at cost less
accumulated amortisation and any accumulated impairment losses. The
online platform is amortised on a systematic basis over its
estimated useful life of 10 years.
Impairment testing on intangible
assets is performed annually or whenever there is an indication
that their carrying amounts may not be recoverable.
3.3. Investment in associates and joint
ventures
An associate is an entity over
which the Group has significant influence and that is neither a
subsidiary nor an interest in a joint venture. Significant
influence is the power to participate in the financial and
operating policy decisions of the investee but does not have
control or joint control over those policies. The Group uses the
equity method of accounting for its associate.
A joint venture is a joint
arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the joint arrangement.
Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing
control. The Group uses the equity method of accounting for its
joint ventures.
Under the equity method the
Group's share of post-acquisition profits and losses and other
comprehensive income is recognised in the consolidated statement of
profit and loss and other comprehensive
income."
Where the Group's share of losses
exceeds the carrying amount of the investment then the carrying
amount of the investment is zero and the Group ceases to recognise
losses unless there is a legal or
constructive obligation for such losses or the Group has made
payments on behalf of the associate or joint venture. If
the associate or joint venture subsequently reports profits, the
entity resumes recognising its share of those profits only after
its share of the profits equals the share of losses not
recognised.
3.4. Investments
In the parent company's financial
statements investments in subsidiaries, associates and joint
ventures are accounted for at cost less accumulated
impairment.
Investments in the equity shares
of companies that are not subsidiaries, associates or joint
ventures are included at fair value through profit or loss under
IFRS 9 using a valuation technique based on the lowest level input
that is significant to the fair value measurement as a
whole:
• Level 1
- Quoted (unadjusted) market prices in active markets for identical
assets or liabilities;
• Level 2
- Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable; and
• Level 3
- Valuation techniques for which the lowest level input that is
significant to the fair value measurement is
unobservable.
3.5. Property, plant, and
equipment
All property, plant and equipment
assets are stated at historical cost less accumulated depreciation
and accumulated impairment losses. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items.
Subsequent costs are included in
the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the
item can be measured reliably. The carrying amount of the replaced
part is derecognised. All other repairs and maintenance are charged
to the Statement of Comprehensive Income during the financial year
in which they are incurred.
Depreciation is charged so as to
write off the cost of assets over their useful economic lives/using
the straight-line method, which is considered to be as
follows:
Fixtures, fittings and office
equipment - 5 years
Content assets - 8
years
Platform - 10 years
The assets' residual values and
useful lives are reviewed, and, if appropriate, asset values are
written down to their estimated recoverable amounts, at each
Statement of Financial Position date.
Gains and losses on disposals are
determined by comparing proceeds with the carrying amounts and are
included in the Statement of Comprehensive Income.
Transfers of content from
inventory to property, plant and equipment are transferred at the
lower of cost and net realisable value and are subsequently carried
at such deemed cost less accumulated depreciation and
impairment.
Content assets are 'show content
assets' and comprise the brick models that are rented out for tours
and shows. Depreciation is provided on content assets over eight
years on a straight-line basis to reflect their useful life.
Residual values, remaining useful lives and depreciation methods
are reviewed annually and adjusted if appropriate.
Depreciation is provided on other
fixtures, fittings and office equipment over five years on a
straight-line basis. Residual values, remaining useful lives and
depreciation methods are reviewed annually and adjusted if
appropriate.
3.6. Leases
In accordance with IFRS 16,
'Leases' a right of use asset, being the present value of the lease
payments over the remaining life of the lease, has been recognised
within non-current assets. The right to use assets and
corresponding lease liability were calculated using a discount rate
of 9% which the Directors consider to be appropriate, based on the
Group's current borrowing structure.
At the inception of a contract,
the company assesses whether the contract is, or contains, a lease.
A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of
time in exchange for consideration. The assessment involves
evaluating if:
a) The
contract involves the use of an identified asset,
b) The
company has the right to obtain substantially all the economic
benefits from the use of the asset throughout the period,
and
c) The
company has the right to direct the use of the asset.
Upon lease commencement, the
company recognizes a right-of-use asset and a corresponding lease
liability. The right-of-use asset is measured at cost, which
includes:
a) The
amount of the initial measurement of the lease
liability,
b) Any
lease payments made at or before the commencement date, less any
lease incentives received,
c) Any
initial direct costs incurred, and
d)
Restoration costs for any obligations to restore the leased asset
to its original condition.
Lease liabilities are initially
measured at the present value of the future lease payments. These
future lease payments are discounted using the interest rate
implicit in the lease or, if that rate cannot be readily
determined, the company's incremental borrowing rate. Lease
payments typically include:
a) Fixed
payments, including in-substance fixed payments,
b)
Variable lease payments linked to an index or rate,
c) The
exercise price of any purchase options that the company is
reasonably certain to exercise,
d)
Payments for penalties for terminating the lease, if the lease term
reflects the company exercising such options, and
e) Any
residual value guarantees.
After the commencement date, the
right-of-use asset is measured using a cost model and depreciated
on a straight-line basis over the shorter of the asset's useful
life or the lease term. The asset is also adjusted for any
re-measurements of the lease liability and is reduced by any
impairment losses.
The lease liability is measured by
increasing the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect lease payments
made, and re-measuring the carrying amount to reflect any
reassessment or lease modifications or to reflect revised fixed
lease payments.
The right-of-use asset is
derecognized at the end of the lease term or when the asset is
transferred, and the company has transferred substantially all the
risks and rewards of ownership. The lease liability is derecognized
when the lease liability is paid or settled.
Any gains or losses arising from
the termination of a lease are recognized in the statement of
profit or loss at the date of termination. The depreciation of the
assets and interest charge are recognised in the profit and loss in
the year and the buildings maturity analysis of lease liabilities
at 31 December 2022 is detailed in Note 26.
3.7. Impairment of assets
The carrying amounts of the
Group's assets, other than inventories, are reviewed at each
reporting date to determine whether there is any indication of
impairment. Whenever there is an
indication of impairment, the company conducts an impairment test;
this involves determining the recoverable amount of the asset and
comparing it to its carrying amount. If the recoverable amount is
less than the carrying amount, then the asset is considered
impaired and written down to its recoverable amount.
An impairment loss is recognised
whenever the carrying amount of an asset or its cash-generating
unit exceeds its recoverable amount. Impairment losses are
recognised in the profit or loss.
Where there is an indication that
previously recognised impairment losses may no longer exist or may
have decreased the previously recognised impairment loss is
reversed. The reversal is limited so that the carrying value of the
asset or its cash-generating unit does not exceed either its
recoverable amount, or the carrying amount that would have been
determined, net of depreciation/amortisation, had no impairment
loss been recognised in prior years. Such a reversal is recognised
in the Statement of Comprehensive Income.
3.8. Inventories
Inventories are stated at the
lower of cost and net realisable value. Cost comprises direct
materials and, where applicable, direct labour costs that have been
incurred in bringing the inventories to their present location and
condition. Cost is calculated using a weighted average cost method.
Net realisable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in
marketing, selling and distribution. The majority of inventories
are measured at fair value following the acquisition of the Bright
Bricks Group in October 2018 as detailed in Note 20.
3.9. Financial
instruments
Financial assets and financial
liabilities are recognised in the Group's statement of financial
position when the Group becomes a party to the contractual
provisions of the instrument. Financial assets and financial
liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or
loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit
or loss.
Financial assets
The Group classifies its financial
assets as either financial assets measured at amortised cost, fair
value through profit and loss or fair value through Other
Comprehensive Income (OCI).
Financial assets at fair value
through OCI consist of equity investments in other companies or
limited partnerships where the Group does not exercise either
control or significant influence.
Financial assets at fair value
through OCI are shown at fair value at each reporting date with
changes in fair value being shown in OCI. In cases where the Group
can reliably estimate fair value, fair value will be determined in
reference to practical completion of each development
project.
All assets for which fair value is
measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value
measurement as a whole:
• Level 1 - Quoted
(unadjusted) market prices in active markets for identical assets
or liabilities,
• Level 2 - Valuation
techniques for which the lowest level input that is significant to
the fair value measurement is directly or indirectly observable;
and
• Level 3 - Valuation
techniques for which the lowest level input that is significant to
the fair value measurement is unobservable.
Financial instruments are
derecognised on the trade date when the Group is no longer a party
to the contractual provisions of the instrument.
3.10. Share based payments
The Company issues equity settled
share-based payment transactions to certain employees and service
providers. Equity settled share-based payment transactions with
employees are measured at the fair value at the date of grant. The
calculation of fair value at the date of grant requires the use of
management's best estimate of volatility, risk free rate and
expected time to exercise the options.
Equity settled share-based payment
transactions with service providers are measured at the fair value
of the goods or services received, except where the fair value
cannot be reliably estimated, in which case they are measured at
the fair value of the equity instrument granted, measured at the
date the entity obtains the goods or the counterparty renders the
service.
3.11. Trade and other receivables
Trade and other receivables are
measured at transaction price which approximates fair value. The
company makes use of a simplified approach in accounting for
expected losses on trade and other receivables and records the loss
allowance as lifetime expected credit losses. The Company makes use
of a provision matrix in applying the simplified approach. In
calculations, the company uses its historical experience, external
indicators and forward looking information to calculate the
expected credit losses.
3.12. Cash and cash equivalents
Cash equivalents comprise
short-term, highly liquid investments that are readily convertible
into known amounts of cash in a period of no greater than three
months from inception date and which are subject to an
insignificant risk of changes in value.
3.13. Trade and other payables
Trade and other payables are
considered to be the same as their fair values, due to short term
nature.
3.14. Interest-bearing borrowings (other than compound
financial instruments)
Interest-bearing borrowings are
stated at amortised cost using the effective interest method. The
effective interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest expense
over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments through the
expected life of the financial liability.
3.15. Revenue recognition
Revenue is the value of goods and
services provided by the Group to customers, net of VAT and
discounts. Revenue includes licence fees, revenue from the sale of
products, rental fees, sale of content (brick-based statues), brick
lease fees and ticket sales from self-promoted events.
Revenue from contracts is
recognised in accordance with IFRS 15 as follows:
i. Identify the
contract with the customer;
ii. Identify separate
performance obligations in the contract;
iii. Determine the
transaction price;
iv. Allocate the transaction price
to separate performance obligations; and
v. Recognise revenue when
the entity satisfies a performance obligation.
Revenue recognised "over time"
versus "point in time"
Revenue recognised over
time:
i. Annual
licence fees - recognised on a straight-line basis over the term of
the agreement. If it is non-refundable, fees are recognised on the
contractual invoice date.
ii. Brick lease
fees - on a straight-line basis in accordance with the terms of the
agreement.
Point in time:
iii. Event licence
fees and revenue shares - in accordance with the specific terms of
the agreement; depending on those terms, it could be when the event
takes place or when certain milestones are reached.
iv. Content fees - on
delivery of the specific content to the client in accordance with
the terms of the agreement.
v. Tour and show
rental fees - recognised based on the terms of the agreement, which
could be upon the start of the tour, show or another specific event
or milestone.
vi. Ticket sales from
self-promoted events - on the date of the event; and
vii. Sales of products - Revenue is
recognised based on the contractual terms, typically when control
of the products is transferred to the customer, which might be upon
shipment, delivery, or another specified event.
Entry as Principal vs.
Agent
The determination of whether the
entity is acting as a principal or an agent depends on if the
entity controls the specified good or service before transferring
it to the customer.
Principal: Recognises revenue in
the gross amount.
Agent: Recognises revenue in the
amount of any commission or fee earned.
The exact determination for each
revenue stream (like event licence fees, tour/show rental fees,
etc.) would depend on the specific terms of the contract and the
actual control exerted by the entity over the goods or
services.
Contract assets and
liabilities
The customer pays the contractual
(fixed) amount based on a payment schedule.
Contracts delivered at a point in
time are invoiced in advance and the payments received before the
Group transfers the related goods or services are recorded in
contract liabilities in the statement of financial position at the
year-end. Contract liabilities are recognised as revenue when the
Group fulfils its performance obligation under the contract (i.e.,
transfers control of the related goods or services to the
customer.
3.16. Taxation
Tax on the profit or loss for the
period comprises current and deferred tax. Tax is recognised in the
Statement of Comprehensive Income except to the extent that it
relates to items recognised directly in equity in which case it is
recognised in equity.
Current tax is the expected tax
payable or receivable on the taxable income or loss for the period,
using tax rates enacted or enacted at the reporting date, and any
adjustment to tax payable in respect of previous
periods.
Deferred tax is provided in full
using the balance sheet liability method. Deferred tax is the
future tax consequences of temporary differences between the
carrying amounts and tax bases of assets and liabilities shown on
the Statement of Financial Position.
The amount of deferred tax
provided is based on the expected manner of recovery or settlement
of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the reporting date.
The Group does not recognise
deferred tax liabilities, or deferred tax assets, on temporary
differences associated with investments in subsidiaries, as it is
not considered probable that the temporary differences will reverse
in the foreseeable future.
A deferred tax asset is recognised
only to the extent that it is probable that future taxable profits
will be available against which the asset can be utilised. The
carrying amounts of the deferred tax assets are reviewed at each
statement of financial position date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be
available to allow all or part of the assets to be
recovered.
3.17. Segmental reporting
The Group has four main operating
segments, namely: BRICKLIVE, StART.Art, Sports and Entertainment,
and KPOP. In identifying these operating segments, management
generally follows the Group's service lines representing its main
products and services (see Note 5).
For management purposes, the Group
uses the same measurement policies as those used in its
consolidated financial statements, except for certain items not
included in determining the operating profit of the operating
segments, such as exceptional costs.
In addition, corporate assets and
expenses which are not directly attributable to the business
activities of any operating segment are not allocated to a segment.
This primarily applies to the Group's headquarters.
3.18. Foreign currencies
Transactions in foreign currencies
are translated to the respective functional currency of the legal
entities (subsidiaries) at the foreign exchange rate ruling at the
date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are
retranslated to the functional currency at the foreign exchange
rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the Statement of Comprehensive
Income.
Non-monetary assets and
liabilities that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date
of the transaction. Non-monetary assets and liabilities denominated
in foreign currencies that are stated at fair value are
retranslated to the functional currency at foreign exchange rates
ruling at the dates the fair value was determined which is
the Foreign Currency Translation
reserve.
3.19. Exceptional items
Exceptional items are those costs
incurred by the Group, or related groups of costs incurred by the
Group, which are considered by the Directors to be material in size
and are unusual and infrequent in occurrence which require separate
disclosure within the financial statements. See Note 7 for details
of exceptional items in the year.
3.20. Government grants and
assistance
Government grants and assistance
are recognised in the related expense line in the consolidated
statement of comprehensive income on a systematic basis over the
period in which the entity recognises the expense, for which the
grant is intended to compensate. In the Consolidated Statement of
Profit or Loss Income from grants is presented net of the related
expenditure.
Therefore, grants in recognition
of specific expenses are recognised in the related expense line in
the same period.
In 2021 the Group made use of the
Coronavirus Job Retention Scheme receiving a total of £185,000 and
£nil in 2022.
3.21. Reserves
Reverse acquisition reserve
The reverse acquisition reserve of
£24,268,000 (2021: 24,268,000) arose in December 2017 with the
acquisition of 100% of the issued share capital of Brick Live
Group, 100% of the issued share capital of Parallel Live Group and
the remaining 61.1% of Brick Live Far East
Limited not already owned indirectly by the Group via Brick Live
International Limited, The transaction was treated as a reverse
acquisition on a consolidated bases with Brick Live Group Limited
considered to be the acquirer for the purposes of the consolidated
financial statements with the cumulative
acquisition adjustment to adjust comparatives to a consistent basis
in the consolidated financial statements treated as a reverse
acquisition reserve.
Foreign Currency Translation reserve
The forex reserve of £568,000
(2021: 570,000) comprises all foreign currency differences arising
from translation of the financial position and performance of
certain subsidiaries, whose functional currency differs to the
Group's presentation currency of GBP.
Own shares reserve
The own share reserve of
£2,105,000 (2021: 2,111,000) arose in August 2020 on the
termination of the previous Equity Share Arrangement ('ESA') with
YA II PN Limited ('YA II') and RiverFort Global Opportunities PCC
Limited ('RiverFort') and the creation of the Employee Benefit
Trust ('EBT').
On termination of the ESA the
Group paid an early termination fee of £143,000 and the EBT
purchased 5,726,480 shares previously held by YA II and RiverFort
(representing 6.51%. of the Company's issued share capital at the
time) into trust, at a cost of £57,000, representing their par
value.
These payments together with the
Group's expected £1,953,000 share of the ESA Payment at the time of
the agreement) which following the termination was no longer
receivable were considered part of the consideration for the share
purchase at a group level and included in Own share reserves.
Movement on the reserve reflects changes in the number of shares
held by the EBT during the year.
Merger reserve
The merger reserve of £15,386,000
(2021: £14,472,000) comprises:
·
£4,833,333, being the premium recognised on the
issue of 16,666,666 new ordinary shares with a nominal value of 1p
and a price of 30p in consideration for the entire issued share
capital of Brick Live Group Limited in December 2017;
·
£966,666, being the premium recognised on the
issue of 3,333,3334 new ordinary shares with a nominal value of 1p
and a price of 30p in consideration for the entire issued share
capital of Parallel Live Group Limited in December 2017;
·
£2,851,297, being the premium recognised on the
issue of 9,832,060 new ordinary shares with a nominal value of 1p
and a price of 30p in consideration for the remaining 61.1% of the
issued share capital of Brick Live Far East Limited not already
owned indirectly by the Company through Brick Live International
Limited in December 2017;
·
£5,415,385, being the premium recognised on the
issue of 8,461,536 new ordinary shares with a nominal value of 1p
and a price of 65p in partial consideration for the entire issued
share capital of Bright Bricks Holdings Limited in October 2018;
and
·
£405,000, being the premium recognised on the
issue of 941.860 new ordinary shares with a nominal value of 1p and
a price of 44p in partial consideration for the entire issued share
capital of Bright Bricks Holdings Limited in November
2019.
·
£914,215, being the premium recognised on the
issue of 182,850 new ordinary shares with a nominal value of 1p and
a price of 6p in partial consideration for the acquisition
of StART.Art
Capital Redemption Reserve
The capital redemption reserve of
£5,034,000 (2021: £5,034,000) comprises the cumulative effect of
previous reorganisations in the capital of the Group and represents
the value of shares redeemed from retained earnings.
Share option reserve
The share option and warrant
reserve of £311,000 (2021: £515,000) is attributable to the
accumulated charge relating to share options and warrants issued by
the Group which is recognised over the vesting period of the share
option or warrant. This is partially offset by the accumulated
charge relating to lapsed share options and warrants, which is
transferred to retained earnings.
4. Accounting estimates
and judgements
The preparation of these
consolidated financial statements in accordance with generally
accepted accounting principles, being UK adopted IFRS, requires the
Directors to make estimates and judgements that affect the reported
amount of assets, liabilities, income and expenditure and the
disclosures made in these consolidated financial statements. Such
estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events.
The significant judgements made by
management in applying the Group's accounting policies as set out
above, and the key sources of estimation which management consider
may have a significant risk of causing a material adjustment to the
reported amounts in the year, were:
Impairment of investments and goodwill
Goodwill Impairment
Goodwill arises on the acquisition
of subsidiaries, associates, or joint ventures and represents the
excess of the cost of acquisition over the fair value of the net
identifiable assets acquired. Goodwill is not amortised but is
tested annually for impairment or more frequently if events
indicate that it may be impaired.
The recoverable amount of a
cash-generating unit (CGU) to which goodwill has been allocated is
determined based on value-in-use calculations. These calculations
require the use of estimates, such as future cash flows expected to
be derived from the asset, discount rates reflecting the risks
specific to the asset, and growth rates.
Key Assumptions and
Sensitivities:
Discount Rate: The rate reflects
the current market assessment of the risks specific to the CGU. Any
change in the discount rate can materially affect the impairment
calculations. The Directors have considered the increased risk
profile of the Group based on its trading performance during 2022,
current forecasts and wider economic conditions and have assessed
the Group's marginal cost of capital has increased to 15% (2021:
9%).
Growth Rate: The expected future
cash flows may involve assumptions about economic growth rates. A
significant reduction in growth rates could indicate potential
impairment.
External Market Indicators:
Factors like industry trends, market capitalization, economic
trends, and other external market indicators are considered when
assessing impairment.
Sensitivity analysis: The
impairment model was assessed for accuracy based on historical
trading performance and a range of alternative scenarios
considered.
Investments Impairment
Investments are assessed at
each reporting date to determine whether there is any indication of
impairment. An impairment loss is recognized when the carrying
amount exceeds the recoverable amount.
Determining the recoverable amount
involves significant judgement. For equity investments, factors
such as significant or prolonged decline in fair value below cost,
adverse changes in the technological, market, economic, or legal
environment, and evidence of financial distress in the investee may
suggest impairment. For debt securities, indicators such as
breaches of contract, non-payment of interest or principal, or
deterioration in creditworthiness of the issuer are
considered.
Key Assumptions and
Sensitivities:
Discount Rate: The rate reflects
the current market assessment of the risks specific to the asset.
Any change in the discount rate can materially affect the
impairment calculations. The Directors have considered the
increased risk profile of the Group based on its trading
performance during 2022, current forecasts and wider economic
conditions and have assessed the Group's marginal cost of capital
has increased to 20% (2021: 9%).
Growth Rate: The expected future
cash flows may involve assumptions about economic growth rates. A
significant reduction in growth rates could indicate potential
impairment.
External Market Indicators:
Factors like industry trends, market capitalization, economic
trends, and other external market indicators are considered when
assessing impairment.
Sensitivity analysis: The
impairment model was assessed for accuracy based on historical
trading performance and a range of alternative scenarios
considered.
Management uses all available
information to make informed judgements on the potential impairment
of goodwill and investments. Given the inherent uncertainties in
estimating future cash flows and changes in market conditions,
actual outcomes may vary, possibly leading to significant
adjustments to the carrying amounts of goodwill and investments in
future periods.
The Directors have carried out
impairment reviews of the Group's intangible assets, goodwill,
investments and the share of net assets of associates as detailed
in Notes 16, 17, 18 and 19.
Forecast sales growth rates.
Forecast sales growth rates are
based on past experience adjusted for the strategic direction and
near-term investment priorities within each CGU.
Key assumptions for the evaluation
of impairment include growth / contraction in 'tours' growth (the
business operations of Brick Live); Events movements (Start Art).
For both entities that have been considered for impairment, the
five-year sales forecasts use the following growth
rates:
Brick Live
'-Growth Rates in sales between 8%
and 88% (Median evaluation at 38%)
'-No adjustment for international
markets as all tours forecast in UK
'-Cost of sales reduction
proportionate with Growth Rates
'-Headcount Reduction static
within restructure 2023
Start Art
'-Growth Rates in sales between
baseline 0% to initial revenues at £200k-£640k range
'-Revenues reflect embryonic
business status projection
'-Cost of sales 70% fixed assuming
margin of 30% split 50:50
Operating profits (Brick Live & Start
Art)
Operating profits are forecast
based on historical experience of operating margins (in the example
of Brick Live; Start art is embryonic business start up), adjusted
for the impact of changes to product costs and cost-saving
initiatives (in the example of Brick Live), including the impact of
the implementation of our cost efficiency programme. Cash
conversion is the ratio of operating cash flow to operating profit.
Management forecasts cash conversion rates based on historical
experience in the instance of Brick Live. Management forecasts for
Start Art are on the basis of researched forecasts and market
intelligence.
Sensitivity analysis - Brick Live
The Directors performed
sensitivity analysis on the estimates of recoverable amounts and
found that the excess of recoverable amount over the carrying
amount of £782,000 of the CGUs would be reduced by £190,000 as a
result of a reasonably possible change in the key assumption of
sales growth in the cash flow forecasts. (Projections reduced to
40% growth - evidenced in new contracts signed January
2024)
The Directors do not consider that
the relevant change in this assumption would have a consequential
effect on other key assumptions. The excess of the £9,622,000 CGU's
recoverable amount over its carrying value is £782,000. The value
assigned to the sales growth assumption is 34% (average rate) in
years 1-3 of the forecast period and 4.5% in years 4-5 (reflecting
stablisation of market).
Sensitivity analysis - Start
Art
The Directors performed
sensitivity analysis on the estimates of recoverable amounts and
found that the recoverable amount which was lower than the carrying
amount of the CGU by £1,691,000 would be reduced to £964,000
(adjusted within the financial statements) as a result of a
reasonably possible change in the key assumption of sales growth in
the cash flow forecasts between 6% and 9% Discount
Factor.
The Directors do not consider that
the relevant change in this assumption would have a consequential
effect on other key assumptions. The shortfall of £, recoverable
amount over its carrying value is £2,960,000. The value assigned to
the sales growth assumption is set target revenue of £640,000 by
the end of the 3rd year in the forecast period and 3% in years
4-5.
For the group of CGUs, whilst the
Directors do not consider that any reasonably possible changes to
the key assumptions would reduce the recoverable amount to the
carrying value of Brick live, the carrying value of Start Art as
adjusted within the financial statements has been impaired to its
original fair value upon acquisition as an associate.
Range of possible outcomes
A change in the market (including
pandemics such as COVID-19) could result in further impairments (or
reversals of the existing impairment charge) of assets in the
consumer and entertaining segment for either entities.
For the Brick Live the following
reasonably possible changes in assumptions upon which the
recoverable amount was estimated, would lead to the following
changes in the net present value of the Retail CGU:
Change in
assumption
Decrease in the value in use of Retail CGU
Static Sales from 2023 Actual (DCF
20%)
(3,064)
Increase in discount rate by 10%
(On assumed
model)
(3,705)
Decrease in long term growth rate
by
2%
(357,00)
For the Start Art entity, the
assumptions are based upon forecasts from a starting point of a new
business (with goodwill). Therefore, the DCF analysis has been
projected on the 50:50 shared profit assumption which does not show
a greater amount to that which has been impaired (DCF Ranges from
6% to 10%)
Depreciation and amortisation
Depreciation rates have been set
to accurately reflect the reduction in value of property, plant and
equipment assets over their estimated useful lives, less their
expected residual value. This requires judgement by the Directors,
who have set the depreciation rates as detailed in Note 3.5 to
these consolidated financial statements based on their knowledge of
the industry and typically how long each asset type retains its
value.
Amortisation rates have been set
to reflect the reduction in value of intangible assets over their
estimated useful lives, less their expected residual value. This
requires judgement by the Directors, who have set the amortisation
rates as detailed in Note 3.2 to these consolidated financial
statements based on their knowledge of the industry and typically
how long each asset type retains its value.
Revenue recognition with customers
Revenue from contracts with
customers is recognised in accordance with IFRS 15. This requires
judgement as revenue transactions are subject to a variety of
contract terms, albeit under the general guidelines of the
accounting policies for revenue recognition as explained in Note
3.15 to these consolidated financial statements.
Share option and warrants
The Black-Scholes model is used to
calculate the appropriate charge of the share options and warrants.
The use of this model to calculate the charge involves a number of
estimates and judgements to establish the appropriate inputs to be
entered into the model, covering areas such as the use of an
appropriate interest rate and dividend rate, exercise restrictions
and behavioural considerations. A significant element of judgement
is therefore involved in the calculation of the charge.
Share-based payments
Employees of the Group receive
remuneration in the form of share-based payment transactions,
whereby employees render services as consideration for equity
instruments, known as equity settled transactions. The Group
records compensation expense for all share-based compensation
awards based on the grant date fair value over the requisite
service period of the award. The fair value determined
on the grant date is expensed on a straight-line basis over the
term of the grant. A corresponding adjustment is made to
equity.
When the terms and conditions of
equity settled share-based payments at the time they were granted
are subsequently modified, the fair value of the share-based
payment under the original terms and conditions and under the
modified terms is determined. Any excess of the modified
fair value is recognised over the remaining vesting period in
addition to the original grant date fair value. The
share-based payment is not adjusted if the modified fair value is
less than the original grant date fair value. Cancellations
or settlements, including those resulting from employee
redundancies, are treated as an acceleration of vesting and the
amount that would have been recognised over the remaining vesting
period is recognised immediately. The Company estimates the
fair value of stock options granted using the Option pricing
formula.
Warrants
The Company has issued warrants as
part of a financing transactions. The warrants have been treated as
a separate derivative instrument accounted for under IAS 32/ IFRS 9
and therefore they shall be assessed against the 'fixed for fixed'
criterion for classification as an equity or liability
instrument.
The number of warrant shares to be
issued is dependent on the warrant amount and the warrant
subscription price. The warrant amount is fixed as the Note Holders
can subscribe up to a maximum amount. However, the Warrant
Subscription Price is variable. As this input is variable the
number of Warrant Shares to be issued is
variable. Therefore, the Company is not exchanging a
fixed amount of cash or another financial asset for a fixed number
of its own equity instruments and therefore the 'fixed for fixed'
test is failed, and the derivative does not meet the equity
definition and is therefore disclosed as a derivative
liability. The warrants are measured at fair value at their
inception and subsequently with fair value changes passing through
the Profit and Loss.
Carrying value of inventory
The Directors have carried out
impairment reviews of the Group's inventory as detailed in Note 20.
Inventory is not readily replaceable and has a long economic life,
a significant element of judgement is therefore involved in
assessing it for impairment. Inventory
consists of loose LEGO bricks (62k LEGO sets and balance is loose
bricks) which are used to create the content pieces.
Carrying value of content assets
The Directors have carried out
impairment reviews of the Group's content assets as detailed in
Note 14. Content
assets are unique and have a long economic life, a significant
element of judgement is therefore involved in assessing them for
impairment.
Expected credit losses
The company makes use of a
simplified approach in accounting for expected losses on trade and
other receivables and records the loss allowance as lifetime
expected credit losses as detailed in Note 22. The Company makes
use of a provision matrix in applying the simplified approach. A
significant element of judgement is therefore involved to calculate
the expected credit losses based on in calculations, the company's
historical experience, external indicators and forward-looking
information.
Accounting treatment of investments, and
acquisition
The Company has an interest, both
directly and indirectly, in a number of entities over which it
exerts a varying degree of control or influence. The accounting
treatment of business combinations in accordance with IFRS 3, and
also consolidation of subsidiaries under IFRS 10 and treatment of
associates under IAS 28 requires a significant element of judgement
in assessing the extent to which the acquired entity represents a
business combination or acquisition of assets and the extent to
which it is controlled or influenced by the Group.
E-Movement (PTY) Limited ('EMPL')
In November 2021 the Company
purchased 271 ordinary shares, representing 20% of the total issued
share capital, in E Movement (PTY) Limited ('EMPL') from David
Ciclitira for a total consideration of £113,460. These shares were
originally purchased by David Ciclitira (acting in his personal
capacity) for the same amount in anticipation of them being
transferred to the Company. EMPL is the South African based
promoter of the Cape Town E Prix which has been confirmed for
Series 9 of the ABB FIA Formula E World Championship which took
place in February 2023. In October 2022 issued a further 475
ordinary shares to a new investor reducing the Company's holding to
14.8%.
The Directors reviewed the
investment and concluded LVCG continued to exercise significant
influence over EMPL despite its shareholding falling below 20%,
noting that:
• David Ciclitira is a
Director of both LVCG and EMPL;
• No one other
shareholder controls more than 50% of the voting rights of EMPL;
and
• LVCG, through its 100%
holding in EMHL, which has a contractual relationship with EMPL
relating to the Cape Town E Prix, has a strategic interest if EMPL
beyond an equity investment.
5. Segment
reporting
The Directors have identified the
Group's business segments by reference to the principal product and
service lines offered and geographical organisation of the business
as reported to the Executive Chairman, identified by the Directors
as the chief operating decision-maker (CODM).
Reportable segments
The reportable segment results for
the year ended 31 December 2022 are as follows:
|
|
BRICKLIVE
|
Sports and
Entertainment
|
StART.
ART
|
K-Pop
|
Unallocated
|
Total
|
|
|
Models and
Sets
|
Tours and
Trails
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Revenue
|
413
|
1,604
|
1,123
|
657
|
977
|
-
|
4,774
|
|
Cost of sales
|
331
|
1,259
|
707
|
475
|
648
|
-
|
3,420
|
|
Administrative expenses
|
348
|
1,255
|
343
|
82
|
311
|
1,358
|
3,697
|
|
Amortisation and
depreciation
|
46
|
992
|
2
|
5
|
2
|
161
|
1,208
|
|
Impairment
|
981
|
1,512
|
30
|
3,186
|
-
|
-
|
5,709
|
|
Finance costs
|
-
|
-
|
-
|
-
|
-
|
107
|
107
|
|
Exceptional items (note
7)
|
-
|
-
|
-
|
-
|
-
|
238
|
283
|
|
Taxation
|
-
|
-
|
-
|
-
|
-
|
57
|
57
|
|
Non controlling interest
|
-
|
-
|
-
|
-
|
9
|
-
|
9
|
|
Segment (loss)/profit for the year
|
(1,293)
|
(3,414)
|
41
|
(3,091)
|
7
|
(1,921)
|
(9,671)
|
The reportable segment results for
the year ended 31 December 2021 as restated were as
follows:
|
|
BRICKLIVE
|
Sports and
Entertainment
|
Unallocated
|
Total
|
|
|
Models and
Sets
|
Tours and
Trails
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Revenue
|
578
|
1,247
|
849
|
-
|
2,674
|
|
Cost of sales
|
436
|
895
|
506
|
-
|
1,837
|
|
Administrative expenses
|
469
|
1,057
|
310
|
698
|
2,534
|
|
Amortisation
depreciation
|
84
|
936
|
1
|
126
|
1,147
|
|
Finance costs
|
-
|
-
|
-
|
108
|
108
|
|
Exceptional items (note
7)
|
-
|
-
|
-
|
381
|
381
|
|
Taxation
|
-
|
-
|
-
|
(688)
|
(688)
|
|
Segment (loss)/profit for the year
|
(411)
|
(1,641)
|
32
|
(625)
|
(2,645)
|
Content depreciation is included
with amortisation and depreciation in this note 5 but in cost of
sales in the Consolidated Statement of Comprehensive Income on page
43.
Administrative expenses are
apportioned to each trading segment in proportion to the revenue
earned.
Segment assets consist primarily
of property, plant and equipment, intangible assets, investments,
goodwill, trade and other receivables and cash and cash
equivalents.
Unallocated assets comprise
deferred taxation and financial assets held at fair value through
profit or loss. Segment liabilities comprise operating liabilities;
liabilities such as deferred taxation are not allocated to
individual business segments.
Segment assets and liabilities as
at 31 December 2022 are as follows:
|
|
BRICKLIVE
|
Sports and
Entertainment
|
StART.Art
|
K-Pop
|
Unallocated
|
Total
|
|
|
Models and
Sets
|
Tours and
Trails
|
|
|
|
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Assets
|
-
|
4,506
|
751
|
1,995
|
1
|
1,107
|
8,360
|
|
Liabilities
|
-
|
7,181
|
674
|
206
|
16
|
-
|
8,077
|
Segment assets and liabilities as
at 31 December 2021 as restated were as follows:
|
|
BRICKLIVE
|
Sports and
Entertainment
|
Unallocated
|
Total
|
|
|
Models and
Sets
|
Tours and
Trails
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Assets
|
-
|
10,415
|
343
|
1,098
|
11,857
|
|
Liabilities
|
-
|
5,323
|
313
|
293
|
5,929
|
Geographical information
The Group's business segments
operated in five principal geographical areas in the year, although
they are managed on a worldwide basis from the Group's head office
in the United Kingdom.
A geographical analysis of the
Group's continuing revenue and non-current assets is given below.
Revenue is allocated based on the location of the customer;
non-current assets are allocated based on the physical location of
the asset.
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Revenue
|
|
|
|
United Kingdom
|
2,015
|
999
|
|
Europe
|
94
|
321
|
|
USA
|
-
|
314
|
|
Asia
|
3
|
147
|
|
South Africa
|
2,662
|
893
|
|
|
4,774
|
2,674
|
|
|
|
|
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Non-current assets
|
|
|
|
United Kingdom
|
4,370
|
5,605
|
|
Europe
|
-
|
270
|
|
USA
|
-
|
668
|
|
South America
|
-
|
-
|
|
Asia
|
-
|
786
|
|
South Africa
|
3
|
-
|
|
|
|
|
|
|
4,373
|
7,329
|
Major customers
Included within BRICKLIVE Tours
and Trails are revenues of £202,000 (2021: £128,000) which arose
from sales to the Group's largest customer.
6. Operating loss before
exceptional items
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
This is stated after charging:
|
|
|
|
Content asset depreciation
(included within cost of sales)
|
853
|
755
|
|
Impairment of content assets
(included within cost of sales)
|
626
|
-
|
|
Loss on disposal of content assets
(included within cost of sales)
|
273
|
-
|
|
Impairment of goodwill (included
within administrative expenses)
|
4,074
|
12
|
|
Write down of inventories
(included within administrative expenses)
|
981
|
-
|
|
Other depreciation and
amortisation (included within administrative expenses)
|
293
|
274
|
|
Inventories recognised as an
expense
|
222
|
637
|
|
Depreciation on right of use
assets
|
62
|
62
|
|
Net foreign exchange
losses
|
24
|
-
|
7. Exceptional
items
The exceptional items consist of
the following:
|
|
2022
|
2021 as
restated
|
|
|
£'000
|
£'000
|
|
Share options and warrants
charge
|
195
|
286
|
|
Transactional and
reorganisational costs
|
43
|
66
|
|
Provision for VAT
|
-
|
17
|
|
Impairment of associate and
intangible assets
|
-
|
12
|
|
|
238
|
381
|
2022 Exceptional items
Share option and warrant charge
Ongoing charges related to options
and warrants issued in connection to previous transactional and
re-organisational events, the costs of which were treated as
exceptional items at the time, continue to be classified as
exceptional items in the year they are recognised.
The Group uses the Black-Scholes
model to value its share option and warrants. Certain judgement is
required in terms of selecting the risk-free interest rate and
standard deviation rate used. The charge for the current year is
£195,000 which may increase or decrease with changes to these
rates.
Transactional and re-organisational costs
Transactional costs relate to
equity raises completed during the year as detailed in Note 28 and
the ongoing guarantee fees relating to the HP Agreement entered
into with Close Leasing Ltd. in August 2020 as detailed in Note
23.
Provision for VAT
The Group is currently reviewing
the way VAT is accounted on certain transactions in the period
prior to February 2021 which could result in a one-off charge of
£243,000, this has resulted in an exceptional charge of £nil,
(2021: £17,000 as restated) and a restatement of the current
liabilities as previously reported in the Consolidated Statement of
Financial Position at 31 December 2021 and 2020 as detailed in note
36.
8. Auditor's
remuneration
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Fees payable
|
268
|
81
|
|
Taxation compliance
|
-
|
8
|
|
|
268
|
89
|
Fees payable to the new auditor,
MHA, for the audit of the annual accounts of the Group and the
Company in 2022 and to Moore Kingston Smith, in 2021.
9.
Employees
The average number of employees
for the Group (including Directors not under employment contracts)
during the year was:
|
|
2022
|
2021
|
|
|
No.
|
No.
|
|
Administration
|
9
|
5
|
|
Production
|
14
|
28
|
|
Sales
|
2
|
2
|
|
|
25
|
35
|
The aggregate payroll costs for
the Group (excluding Directors not under employment contracts)
were:
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Wages, salaries and
fees
|
711
|
1,448
|
|
Social security costs
|
52
|
77
|
|
Pension costs
|
8
|
13
|
|
|
771
|
1,538
|
Wages, salaries and fees are
stated in this note 9 gross of amounts received in accordance with
the Coronavirus Job Retention Scheme £Nil (2021: £185,000) which is
netted off in the Consolidated Statement of Comprehensive Income on
page 43. Defined pension contribution plans -A defined
contribution plan is a post-employment benefit plan under which the
Company pays fixed contributions into a separate entity and will
have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution pension plans
are recognised as an expense in the Statement of Comprehensive
Income in the periods during which services are rendered by
employees.
The costs of short-term employee
benefits are recognised as a liability and an
expense.
Termination benefits are
recognised immediately as an expense when the Group is demonstrably
committed to terminate the employment of an employee or to provide
termination benefits.
The Company has no employees other
than Directors, whose Employment costs are disclosed in note
10.
10. Remuneration of Directors and key
management personnel
In the opinion of the Board, only
the Directors of the Company and the other members of the Executive
Team, as detailed in the Corporate Governance Report, are regarded
as key management personnel. The remuneration of key management
personnel during 2022 was, in aggregate, £424,000 (2021:
£451,000).
Directors' remuneration and fees,
including Non-Executive Directors, during the year were as follows,
(no pension contributions were made in either 2022 or
2021):
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
David Ciclitira
|
275
|
261
|
|
Bryan Lawrie
|
33
|
17
|
|
Maria Serena Papi
|
20
|
20
|
|
Ranjit Murugason
|
50
|
107
|
|
Stephen Birrell (appointed 27 July
2021)
|
46
|
27
|
|
Trudy Norris-Grey (resigned 14
February 2021)
|
-
|
15
|
|
Simon Horgan (resigned 17 February
2021)
|
-
|
2
|
|
Mark Freebairn (resigned 14
February 2021)
|
-
|
2
|
|
|
424
|
451
|
|
David Ciclitira
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
UK Chairman's fees*
|
25
|
-
|
|
International consultancy
fees
|
250
|
250
|
|
Additional contracted work during
the year
|
-
|
11
|
|
|
275
|
261
|
*In 2021 David Ciclitira
voluntarily waived his Chairman's fees.
Bryan Lawrie
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Consultancy Fees
|
9
|
-
|
|
Non-Executive fees
|
24
|
17
|
|
|
33
|
17
|
Fees for the services of Bryan
Lawrie as Chief Financial Officer were paid to CFO Partners
Limited.
Ranjit Murugason
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Consultancy Fees
|
-
|
67
|
|
Non-Executive fees
|
50
|
40
|
|
|
50
|
107
|
Stephen Birrell
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Consultancy fees
|
13
|
15
|
|
Non-Executive fees
|
33
|
12
|
|
|
46
|
27
|
Fees for consultancy services
provided by Stephen Birrell were paid to Ossian Energy
Limited.
In April 2019 the Group adopted a
share option scheme for certain Directors and senior management.
Options are generally exercisable at a price equal to the market
price of the Plc shares on the day immediately prior to the date of
the grant. Options are forfeited if the employee leaves the Group
before the options vest.
In April 2022 a total of 4,669,000
new options were granted to certain Directors, employees and
contractors with an exercise price of 5p per option, all other
options were forfeited as a condition of grant of the new
options.
As at 31 December 2022 the
following outstanding share options were held by Directors and key
management personnel. No options were issued to directors in
2021.
|
|
2022
|
2021
|
|
David Ciclitira
|
2,000,000
|
1,341,891
|
|
Bryan Lawrie
|
50,000
|
335,472
|
|
Maria Serena Papi
|
50,000
|
-
|
|
Ranjit Murugason
|
50,000
|
-
|
|
Stephen Birrell (appointed 27 July
2021)
|
50,000
|
-
|
|
|
2,200,000
|
1,677,363
|
Further information on share
options are set out in Note 31.
Further information on related
party transactions are set out in Note 33.
11. Finance costs
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Loan interest
|
79
|
65
|
|
Interest expense on lease
liabilities
|
14
|
19
|
|
Other interest
|
14
|
24
|
|
|
107
|
108
|
Included in loan interest is
£12,000 (2021: £22,000) paid to David Ciclitira in accordance with
the loan facility described in Note 23, see also Note
33.
12. Taxation
|
|
2022
|
2021 as
restated
|
|
Current tax
|
£'000
|
£'000
|
|
UK Corporation tax in respect of
current year:
|
-
|
-
|
|
Foreign tax:
|
69
|
-
|
|
Adjustments in respect of prior
years
|
-
|
(56)
|
|
Total tax (credit) charge for the year
|
69
|
(56)
|
|
|
|
|
|
Deferred taxation
|
|
|
|
Original and reversal of temporary
differences
|
(12)
|
(632)
|
|
Total deferred taxation charge
|
(12)
|
(632)
|
|
|
|
|
|
Tax
charge on loss on ordinary activities
|
57
|
(688)
|
|
|
2022
|
2021 as
restated
|
|
|
£'000
|
£'000
|
|
Loss on ordinary activities before
tax
|
(9,605)
|
(3,333)
|
|
Loss on ordinary activities at the
standard rate of corporation tax of 19% (2021: 19%)
|
(1,824)
|
(633)
|
|
Effect of disallowable
expenditure
|
988
|
234
|
|
Fixed asset differences
|
1
|
-
|
|
Foreign Tax
|
43
|
-
|
|
Remeasurement of deferred tax due
to change in tax rates
|
(264)
|
204
|
|
Movement in deferred tax not
recognised
|
1,113
|
(447)
|
|
Adjustment in respect of prior
years
|
-
|
(56)
|
|
Effect of different tax rates
applied in overseas jurisdictions
|
-
|
10
|
|
Total tax charge/(credit) for the year
|
57
|
(688)
|
Effective April 2023, the UK
taxation rate will increase from 19% to 25%.
13. Earnings per
share
The basic earnings per share is
calculated by dividing the (loss)/profit attributable to equity
shareholders by the weighted average number of shares in issue
during the year. In calculating the diluted earnings per share, any
outstanding share options, warrants and convertible loans are taken
into account where the impact of these is dilutive.
|
|
2022
|
2021 as
restated
|
|
Loss for the year after tax
(£'000)
|
(9,671)
|
(2,645)
|
|
Weighted average number of shares
in issue
|
193,854,419
|
131,155,672
|
|
Basic and diluted losses per
share
|
(5.0p)
|
(2.0p)
|
Because the Group is loss making,
diluted losses per share in both 2022 and 2021 are the same as
basic losses per share, despite share options and warrants in issue
during these years as detailed in note 31.
14. Property, plant and
equipment
|
Group
|
Content
|
Fixtures, fittings and
office equipment
|
Total
|
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cost
|
|
|
|
|
|
|
|
Cost at start of year
|
6,142
|
5,556
|
178
|
175
|
6,320
|
5,731
|
|
Additions for year
|
205
|
586
|
4
|
3
|
209
|
589
|
|
Disposals
|
(686)
|
-
|
-
|
-
|
(686)
|
-
|
|
Cost at end of year
|
5,661
|
6,142
|
182
|
178
|
5,843
|
6,320
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
Cumulative depreciation at start
of year
|
2,241
|
1,487
|
147
|
100
|
2,388
|
1,587
|
|
Charge for year
|
824
|
754
|
27
|
47
|
851
|
801
|
|
Impairment charge
|
628
|
-
|
-
|
-
|
628
|
-
|
|
Eliminated on disposal
|
(411)
|
-
|
-
|
-
|
(411)
|
-
|
|
Cumulative depreciation at end of year
|
3,282
|
2,241
|
174
|
147
|
3,456
|
2,388
|
|
|
|
|
|
|
|
|
|
Net book value at end of year
|
2,379
|
3,901
|
8
|
31
|
2,387
|
3,932
|
|
|
|
|
|
|
|
|
|
Net book value at start of year
|
3,901
|
4,069
|
31
|
75
|
3,932
|
4,144
|
The Company had no property, plant
and equipment assets in either 2022 or 2021.
The Directors reviewed the
carrying value at 31 December 2022 for indicators of impairment for
each asset and it was determined that content assets should be
impaired by £628,000 (2021: £nil). The impairment charge is based
on the estimated net book value of assets that have been idle
during the year. Management tested the assets for impairment and
assessed the recoverable amount to be less than carrying amount by
the amount of the impairment.
15. Right of use
Assets
|
Buildings
|
Group
|
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Cost
|
|
|
|
Cost at start of year
|
308
|
308
|
|
Additions for year
|
-
|
-
|
|
Cost at end of year
|
308
|
308
|
|
|
|
|
|
Depreciation
|
|
|
|
Cumulative depreciation at start
of year
|
138
|
77
|
|
Charge for year
|
62
|
62
|
|
Cumulative depreciation at end of year
|
200
|
139
|
|
|
|
|
|
Net book value at end of year
|
108
|
169
|
|
Net book value at start of year
|
169
|
231
|
The Company had no right of use
assets in either 2022 or 2021.
16. Intangible
assets
|
Group
|
Trademarks
|
Novated
Contracts
|
Software
Platform
|
Total
|
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cost
|
|
|
|
|
|
|
|
|
|
Cost at start of year
|
90
|
89
|
1,450
|
1,450
|
-
|
-
|
1,540
|
1,539
|
|
Additions for year
|
36
|
1
|
|
|
83
|
-
|
119
|
1
|
|
Cost at end of year
|
126
|
90
|
1,450
|
1,450
|
83
|
-
|
1,659
|
1,540
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
|
|
Cumulative amortisation at start of
year
|
32
|
23
|
277
|
-
|
-
|
-
|
309
|
23
|
|
Charge for year
|
8
|
9
|
280
|
277
|
5
|
-
|
293
|
286
|
|
Cumulative amortisation at end of year
|
40
|
32
|
557
|
277
|
5
|
-
|
602
|
309
|
|
|
|
|
|
|
|
|
|
|
|
Net
book value at end of year
|
86
|
58
|
893
|
1,173
|
78
|
-
|
1,057
|
1,231
|
|
Net
book value at start of year
|
58
|
66
|
1,173
|
1,450
|
-
|
-
|
1,231
|
1,516
|
|
Company
|
Trademarks
|
Novated
Contracts
|
Total
|
|
|
2022
|
2021
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cost
|
|
|
|
|
|
|
|
Cost at start of year
|
-
|
-
|
1,450
|
1,450
|
1450
|
1,450
|
|
Additions for year
|
24
|
-
|
-
|
-
|
24
|
-
|
|
Cost at end of year
|
24
|
-
|
1,450
|
1,450
|
1,474
|
1,450
|
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
Cumulative amortisation at start
of year
|
-
|
-
|
277
|
-
|
277
|
-
|
|
Charge for year
|
-
|
-
|
280
|
277
|
280
|
277
|
|
Cumulative amortisation at end of year
|
-
|
-
|
557
|
277
|
557
|
277
|
|
|
|
|
|
|
|
|
|
Net book value at end of year
|
24
|
-
|
893
|
1,173
|
917
|
1,173
|
|
Net book value at start of year
|
-
|
-
|
1,173
|
1,450
|
1,173
|
1,450
|
Trademarks
Trademarks are obtained for each
show in each jurisdiction around the world. Trademarks are
amortised over their estimated useful lives, which is on average 10
years. The carrying value of trademarks at 31 December 2022 is
£86,000 (2021; £58,000).
LCSE novated contracts
In December 2020 the Company
formed a new Sports and Entertainment division ('LCSE') through the
acquisition of the entire issued share capital of Live Company
Sports and Entertainment Limited together with its wholly owned
subsidiary Live Company Sports and Entertainment (Pty) Limited and
50% interest in K-Pop Europa Limited for £650,000. Prior to the
acquisition Live Company Sports and Entertainment Limited was 100%
owned by David Ciclitira.
The Company also purchased certain
contracts from World Sport South Africa (Pty) Limited for £500,000
and acquired the entire issued share capital of E Movement Holdings
Ltd for £300,000. Prior to the acquisition E Movement Holdings Ltd
was 33.34% owned by David Ciclitira.
The substance of these
transactions being the acquisition of a series of contracts rather
than a business combination as defined in IFRS 3 'Business
Combinations'. The acquired contracts are amortised over the period
of the rights acquired, where contracts are renewable and are
likely to be renewed for a further period such further period, but
no subsequent periods, is considered to be part of the period of
the rights acquired. The carrying value of these contracts at 31
December 2022 is £893,000 (2021; £1,173,000).
StART.Art
In July 2022 the Company acquired
the remaining 80.6% of StART.Art not already owned by the Group
from David Ciclitiura and Ranjit Murugason. Prior to July 2022 the
Company did not exercise significant influence over StART.Art and
the Company's interest was included in investments in Other
Financial Assets in the Consolidated Statement of Financial
Position as 31 December 2021.
On acquisition StART.Art included
intangible assets, comprising the capitalised costs of developing
the online StART.Art software platform, the carrying value of these
assets is £78,000 (2021: £nil).
The directors have reviewed the
value of the online software platform included in Intangible Assets
and determined that there is no impairment of its value. This
conclusion is based on a detailed assessment of various factors,
including market conditions, technological advancements, and the
platform's ongoing performance and strategic importance.
17. Investments
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cost
|
|
|
|
|
|
Cost at start of the
year
|
1,113
|
-
|
21,276
|
20,163
|
|
Additions for the year
|
-
|
1,113
|
3,202
|
1,113
|
|
Disposals for the year
|
(1,000)
|
-
|
-
|
-
|
|
Cost at end of year
|
113
|
1,113
|
24,478
|
21,276
|
|
|
|
|
|
|
|
Impairment
|
|
|
|
|
|
At start of the year
|
-
|
-
|
10,438
|
14,138
|
|
Share of loss in associate
company
|
30
|
-
|
30
|
-
|
|
Impairment/(reversal) in the
year
|
-
|
-
|
4,349
|
(3,700)
|
|
Cumulative impairment at end of year
|
30
|
-
|
14,817
|
10,438
|
|
|
|
|
|
|
|
Net book value at end of the year
|
83
|
1,113
|
9.661
|
10,838
|
|
Net book value at start of year
|
1,113
|
-
|
10,838
|
6,025
|
Investments in subsidiaries and associates in the books of
the Company
|
|
At start of
year
|
Additions
|
Share of loss in associate
company
|
(Impairment)
/reversal of
impairment
|
At end of
year
|
|
|
£'000
|
£'000
|
|
£'000
|
£'000
|
|
Brick Live Group (incorporating
Bright Bricks Limited)
|
8,841
|
-
|
-
|
-
|
8,841
|
|
Parallel Live Group
|
884
|
-
|
-
|
(884)
|
-
|
|
StART.Art
|
-
|
4,202
|
-
|
(3,465)
|
737
|
|
E-Movement (PTY) Ltd
|
113
|
-
|
(30)
|
-
|
83
|
|
|
9,838
|
4,202
|
(30)
|
(4,349)
|
9,661
|
The Directors considered the
carrying value at 31 December 2022 for each asset or cash
generating unit, identified above in accordance with the accounting
policy set out in note 4.
Given the inherent uncertainties
in estimating future cash flows and changes in market conditions,
actual outcomes may vary, possibly leading to significant
adjustments to the carrying amounts. When considering the carrying
amounts of each CGU Management use sensitivity analysis to test a
number of scenarios taking into account the principal risks and
uncertainties facing the Group and make a judgement based on all
available information to make informed judgements about the value
in use of each CGU.
Brick Live Group - based on a
detailed budget and forecast, discounted over five years at the
Group's current pre-tax cost of capital, considered by the
Directors to be 20% (2021: 9%), and it was determined no impairment
was required.
Due to the improved outlook for
Brick Live Group following the relaxation of COVID-19 related
restrictions in 2021 the Directors determined a partial reversal of
the 2020 impairment in the carrying value of the Company's
investment in Brick Live Group was required at 31 December 2021.
The carrying value of the Company's investment in Brick Live Group
at 31 December 2021 was £8,841,000 and represented the value in use
of the CGU.
Parallel Live Group - no
income has been recorded for Parallel Live Group in 2022 and no
income is expected for 2023 or 2024, and whilst discussions are
ongoing regarding future events Parallel Live Group is expected to
be loss making and the carrying value has been impairment to
£nil.
StART Art - based on a
detailed budget and forecast, discounted over five years at 5.5%,
being the Bank of England base rate at 31 December 2022 plus 2%,
the Directors determined that an impairment to the carrying value
was required to reflect the current expectations and that projected
new sources of income have not been realised.
The carrying value of StARt.Art
prior to the impairment represented the fair value on acquisition
as determined with reference to a valuation report prepared by an
independent firm of accountants for the independent directors for
the purposes of Rule 13 of the AIM Rules ("Rule
13") as the acquisition was a Related Party Transaction. Following
the impairment the carrying value of the Company's investment in
StARt.Art is its value in use, being
£737,000.
E-Movement (PTY) Ltd - has
been impaired to reflect the Group's share of the losses incurred
by the associate.
Financial assets
The Directors considered the
carrying value at 31 December 2022 for each investment, identified
below, and it was determined that no further impairment was
required.
|
|
At start of
year
|
(Disposals)/Additions
|
Impairment
|
At end of
year
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Start Art Global Ltd
|
1,000
|
(1,000)
|
-
|
-
|
|
|
1,000
|
(1,000)
|
-
|
-
|
Prior to July 2022, and the
acquisition of the remaining 80.06% of StART.Art, the Company did
not exercise significant influence over StART.Art and the Company's
interest was included in Investments in Other Financial Assets in
the Consolidated Statement of Financial Position at 31 December
2021. From July 2022 the results of StART.Art have been
consolidated and the investment previously included in Investments
in Other Financial Assets treated as a disposal.
18. Goodwill
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cost at start and end of year
|
8,888
|
8,888
|
-
|
-
|
|
Additions for the year
|
3,924
|
-
|
|
|
|
Cost at end of year
|
12,812
|
8,888
|
-
|
-
|
|
|
|
|
|
|
|
Impairment
|
|
|
|
|
|
At start of the year
|
8,004
|
7,992
|
-
|
-
|
|
Impairment in the year
|
4,070
|
12
|
-
|
-
|
|
Cumulative impairment at end of year
|
12,074
|
8,004
|
-
|
-
|
|
|
|
|
|
|
|
Net
book value at end of year
|
738
|
884
|
-
|
-
|
|
Net
book value at start of year
|
884
|
896
|
-
|
-
|
|
Goodwill is allocated to following CGUs:
|
|
|
|
|
|
|
At start of
year
|
Additions
|
Impairment
|
At end of
year
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Parallel Live Group
|
884
|
-
|
(884)
|
-
|
|
StART.Art
|
-
|
3,924
|
(3,186)
|
738
|
|
|
884
|
3,924
|
(4,070)
|
738
|
Impairment review of goodwill
The Directors considered the
carrying value at 31 December 2022 for each asset or cash
generating unit, identified above in accordance with the accounting
policy set out in note 4.
Given the inherent uncertainties
in estimating future cash flows and changes in market conditions,
actual outcomes may vary, possibly leading to significant
adjustments to the carrying amounts. When considering the carrying
amounts of each CGU Management use sensitivity analysis to test a
number of scenarios taking into account the principal risks and
uncertainties facing the Group and make a judgement based on all
available information to make informed judgements about the value
in use of each CGU.
Parallel Live Group - no
income has been recorded for Parallel Live Group in 2022 and no
income is expected for 2023 or 2024, and whilst discussions are
ongoing regarding future events Parallel Live Group is expected to
be loss making and the carrying value has been impairment to
£nil.
StART Art - based on a
detailed budget and forecast, discounted over five years at 5.5%,
being the Bank of England base rate at 31 December 2022 plus 2%,
the Directors determined that an impairment to the carrying value
was required to reflect the current expectations and that projected
new sources of income have not been realised.
The carrying value of StARt.Art
prior to the impairment represented the fair value on acquisition
as determined with reference to a valuation report prepared by an
independent firm of accountants for the independent directors for
the purposes of Rule 13 of the AIM Rules ("Rule
13") as the acquisition was a Related Party Transaction. Following
the impairment the carrying value of the Company's investment in
StARt.Art is its value in use, being
£738,000.
START Art Global ('StART.Art')
In May 2021 the Company subscribed
to 389 ordinary shares in StART.Art, for a total cash consideration
of £1,000,000 the amount being supported by a valuation report
prepared by an independent firm of accountants for the independent
directors for the purposes of Rule 13 of the AIM Rules ("Rule 13")
as the acquisition was a Related Party Transaction. In November
2021 StART.Art acquired the entire issued share capital of Start
(2013) Limited, the promoter of the StART Art Fair, in an all share
transaction, resulting in a decrease in the Company's interest in
the enlarged group from 18.6% to 14.6% with no diminution of value.
In December 2021 StART.Art issued a further 180 ordinary shares to
LVCG for nominal consideration increasing LVCG's holding to 19.94%.
In July 2022 the Company acquired the remaining 80.06% of StART.Art
not already owned by the Group from David Ciclitira and Ranjit
Murugason for total consideration of £3,202,000, again the amount
being supported by a valuation report prepared by an independent
firm of accountants for the independent directors for the purposes
of Rule 13 of the AIM Rules ("Rule 13") as the acquisition was a
Related Party Transaction.
Prior to July 2022 the Company did
not exercise significant influence over StART.Art and the Company's
interest was included in Investments in Other Financial Assets in
the Consolidated Statement of Financial Position at 31 December
2021. The results of StART.Art have been consolidated from the date
of the acquisition of the remaining 80.06% resulting in goodwill of
£3,924,000 arising.
Projected new sources of income
have not been realised and therefore the carrying value has been
impaired to £738,000 to reflect the current
expectations.
KPOP Lux ('KPL')
In May 2022 the Company
incorporated a new 100% owned subsidiary KPOP Lux Limited. KPL
further incorporated several dormant entities, being K.Flex Asia
Limited, K.Flex Americas Limited and K.Flex Enterprises
Limited.
19. Investments in Associates and
Joint Ventures
Brick Live Centre Education Development (Beijing) Company Ltd
('BLCED')
In July 2017, BLFE entered into a
long-term agreement with Fortune Access, to create a limited
liability foreign enterprise company in China called Brick Live
Centre Education Development (Beijing) Company Limited. BLFE agreed
to invest 980,000 RMB (approximately £111,000) for a 49%
shareholding. Based on the performance in the year ended 31
December 2020 the investment in the associate was impaired to £nil.
In August 2021 the Fortune Access contributed a further 516,000 RMB
(approximately £61,000), reducing the Group's interest to
36%.
The Group accounts for the
associate under the equity method of accounting.
|
The results of BLCED in the year are:
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
|
|
|
|
Revenue
|
10
|
473
|
|
Loss before tax
|
(600)
|
(468)
|
|
Taxation
|
-
|
-
|
|
Loss after tax
|
(600)
|
(468)
|
|
|
|
|
|
Current assets
|
225
|
380
|
|
Non-current assets
|
275
|
490
|
|
Current liabilities
|
(1,443)
|
(1,205)
|
|
Non-current liabilities
|
(1)
|
(64)
|
|
|
(944)
|
(400)
|
BLCED losses have been recognised
through the Consolidated Statement of Comprehensive Income to the
extent that they do not exceed the Group's initial investment in
BLCED together with the Group's share of its accumulated profits.
The Group's unrecognised share of BLCED's loss for the year to 31
December 2022 is £216,000 (2021: £168,000). The Group's
unrecognised share of BLCED's cumulative loss is £334,000. The
Group has no legal obligation to cover the losses.
Parallel Three Six Zero Inc ('PTSZ')
In September 2018, Parallel Live
Group signed a joint venture agreement with US-based company Three
Six Zero, forming the new company Parallel Three Six Zero Inc. It
has been granted exclusive rights by Parallel Live Group to promote
BRICKLIVE events in North America and Canada with Brick Live
International Limited as its content provider.
There were no BRICKLIVE events in
North America operated by PTSZ in 2022 or 2021.
The Group accounts for the joint
venture under the equity method of accounting.
|
The results of the PTSZ in the year are:
|
|
|
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
|
|
|
|
Revenue
|
-
|
-
|
|
Loss before tax
|
-
|
-
|
|
Taxation
|
-
|
-
|
|
Loss after tax
|
-
|
-
|
|
|
|
|
|
Current assets
|
-
|
-
|
|
Non-current assets
|
-
|
-
|
|
Current liabilities
|
(27)
|
(27)
|
|
Non-current liabilities
|
-
|
-
|
|
|
(27)
|
(27)
|
E-Movement (PTY) Ltd ('EMPL')
In November 2021 the Company
purchased 271 ordinary shares, representing 20% of the total issued
share capital, in E Movement (PTY) Limited ('EMPL') from David
Ciclitira for a total consideration of £113,460. These shares were
originally purchased by David Ciclitira (acting in his personal
capacity) for the same amount in anticipation of them being
transferred to the Company. EMPL is the South African based
promoter of the Cape Town E Prix which has been confirmed for
Series 9 of the ABB FIA Formula E World Championship which took
place in February 2023. In October 2022 issued a further 475
ordinary shares to a new investor reducing the Company's holding to
14.8%
|
The results of the EMPL in the year are:
|
|
|
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
|
|
|
|
Revenue
|
98
|
52
|
|
Loss before tax
|
(154)
|
(75)
|
|
Taxation
|
-
|
-
|
|
Loss after tax
|
(154)
|
(75)
|
|
|
|
|
|
Current assets
|
2,257
|
384
|
|
Non-current assets
|
3,080
|
-
|
|
Current liabilities
|
(4,564)
|
(283)
|
|
Non-current liabilities
|
-
|
-
|
|
|
773
|
102
|
20. Inventories
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Inventories
|
2,611
|
3,742
|
-
|
-
|
|
Work in progress
|
225
|
63
|
-
|
-
|
|
|
2,836
|
3,805
|
-
|
-
|
Included in inventories is
£1,875,000 (2021: £3,097,000) of stock acquired on acquisition of
Bright Bricks Group and included at fair value at that date and is
subsequently recognised at lower of that initial amount and net
realisable value. Inventories is made up of individual LEGO bricks
and LEGO sets. The Directors considered the carrying value at 31
December 2022 for inventories and it was determined that the
carrying value should be written-down by £981,000 (2021: £nil) and
is included in administrative expenses in the consolidated
statement of comprehensive income.
Included in inventories is
£1,500,000 (2021: £1,500,000) subject to a sale and HP Agreement
entered into with Close Leasing Limited, (see Note
23).
21. Trade and other
receivables
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Trade receivables
|
369
|
231
|
-
|
2
|
|
Amounts owed by subsidiaries (note
33)
|
-
|
-
|
788
|
1,155
|
|
Other receivables
|
181
|
57
|
99
|
50
|
|
Prepayments and accrued
income
|
311
|
224
|
208
|
123
|
|
|
860
|
512
|
1,095
|
1,330
|
Amounts owed by subsidiaries are
unsecured, interest free and repayable on demand.
The Group's method for estimating
an allowance is based upon a review of accounts deemed delinquent
(90 days past due), the Company's historical bad debt experience
and management's judgment. Any uncollected balances are written off
after all methods of collection have been exhausted. Based on the
Group's estimates on 31 December 2022 an expected credit losses of
£155,000 (2021: £48,000) has been recorded within Trade
receivables.
The Group makes use of a
simplified approach in accounting for expected losses on trade and
other receivables and records the loss allowance as lifetime
expected credit losses. The Group makes use of a provision matrix
in applying the simplified approach. In calculations, the company
uses its historical experience, external indicators and
forward-looking information to calculate the expected credit
losses.
22. Cash and cash
equivalents
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Cash at bank
|
291
|
211
|
-
|
-
|
23. Borrowings
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Loan due within one
year
|
511
|
477
|
63
|
56
|
|
Loan due after one year
|
819
|
1,201
|
130
|
185
|
|
|
1,330
|
1,678
|
193
|
241
|
In April 2020 the Company entered
into a £250,000 CBILS loan agreement with NatWest Bank Plc of which
£185,000 remained outstanding at the balance sheet date. The loan
is unsecured, for a term of six years with an effective interest
rate of 4.08%.
In April 2020 the Group entered
into a £500,000 loan agreement with David Ciclitira at an interest
rate of 16.2%, in March 2022 the outstanding balance was repaid in
full.
In August 2020 the Group entered
into an agreement with Close Leasing Limited whereby stock
totalling £1,500,000 included under Inventories in the Statement of
Financial Position in these condensed consolidated financial
statements was sold to Close Leasing Limited and purchased back
under the terms of a £1,500,000 Hire Purchase Facility (HP
Agreement) provided in conjunction with the CBILS, of which
£1,051,000 remained outstanding at the balance sheet date. The HP
Agreement was for a term of five years at an effective interest
rate of 5.14% secured against the £1,500,000 of stock subject to
the agreement and a fixed and floating charge over the Group's
other assets.
In August 2020 Start Art (2013)
Ltd entered into a £50,000 bounce back loan agreement with Coutts
of which £35,000 remained outstanding at the balance sheet date.
The loan is unsecured, for a term of five years with an effective
interest rate of 2.52%.
23.1. Movement of borrowings in the financial
period
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Opening balance
|
1,678
|
2,045
|
241
|
250
|
|
Borrowing
|
59
|
-
|
8
|
-
|
|
Repayment of loan
capital
|
(407)
|
(367)
|
(56)
|
(9)
|
|
Closing balance
|
1,330
|
1,678
|
193
|
241
|
24. Trade and other
payables
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Trade payables
|
1,683
|
1,096
|
544
|
533
|
|
Amounts owed to
subsidiaries
|
-
|
-
|
601
|
217
|
|
Other payables
|
2,513
|
275
|
2,491
|
188
|
|
Other taxation and social
security
|
1,193
|
1,265
|
15
|
32
|
|
Accruals and deferred
income
|
1,236
|
1,415
|
775
|
579
|
|
|
6,625
|
4,051
|
4,426
|
1,549
|
Amounts owed to subsidiaries are
unsecured, interest free and repayable on demand.
Other payables include £2,091,000
(2021: £160,000) of deferred consideration.
25. Financial risks
The Group and Company operations
expose them to a number of financial risks. The Directors aim to
protect the Group and Company against the potential adverse effects
of these financial risks.
Financial assets
Financial assets include cash and
trade and other receivables, excluding prepayments.
These amounts, where appropriate,
have been shown separately on the face of the Statement of
Financial Position. Funds not immediately required for the Group
and Company's operations are invested in bank deposits. It is the
Directors' opinion that the carrying values of cash, trade
receivables and investments approximate to their fair
values.
Financial liabilities
Financial liabilities include
current and non-current borrowings and trade and other payables
(excluding taxation and social security and deferred
income).
All amounts are carried at
amortised cost. These amounts have been disclosed in the notes to
the financial statements. It is the Directors' opinion that the
carrying values of financial liabilities approximate to their
fair-value.
Liquidity risk
The Group and Company's surplus
liquid resources are maintained on short-term interest-bearing
deposits. The Group and Company plans to continue to meet operating
and other loan commitments as they fall due. Liquidity risk is
managed through cash flow forecasts and regular
planning.
Set out below are liquidity risk
comparative tables as at 31 December 2022 and 31 December
2021.
|
Remaining contractual maturities year ended 31 December
2022
|
|
Group
|
Within
3 months
|
> 3
months
< 1
year
|
> one
year
< 5
years
|
Total carrying
amount
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Bank loans and
borrowings
|
147
|
364
|
819
|
1,330
|
|
Trade and other
payables
|
4,196
|
-
|
-
|
4,196
|
|
Lease liabilities
|
17
|
55
|
50
|
122
|
|
|
4,360
|
419
|
869
|
5,648
|
|
|
|
|
|
|
|
Company
|
Within
3 months
|
> 3
months
< 1
year
|
> one
year
< 5
years
|
Total carrying
amount
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Bank loans and
borrowings
|
21
|
42
|
130
|
193
|
|
Trade and other
payables
|
3,636
|
-
|
-
|
3,636
|
|
|
3,657
|
42
|
130
|
3,829
|
|
|
|
|
|
|
|
Remaining contractual maturities year ended 31 December
2021
|
|
Group
|
Within
3 months
|
> 3
months
< 1
year
|
> one
year
< 5
years
|
Total carrying
amount
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Bank loans and
borrowings
|
185
|
292
|
1,201
|
1,678
|
|
Trade and other
payables
|
1,373
|
-
|
-
|
1,373
|
|
Lease liabilities
|
16
|
50
|
122
|
188
|
|
|
1,574
|
342
|
1,323
|
3,239
|
|
|
|
|
|
|
|
Company
|
Within
3 months
|
> 3
months
< 1
year
|
> one
year
< 5
years
|
Total carrying
amount
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Bank loans and
borrowings
|
14
|
42
|
185
|
241
|
|
Trade and other
payables
|
938
|
-
|
-
|
938
|
|
|
952
|
42
|
185
|
1,179
|
|
|
|
|
|
|
| |
Trade and other payables above
exclude taxation and accruals and deferred income.
Credit risk
Financial assets past due but not
impaired as at 31 December 2022:
|
|
Not impaired and not past
due
|
Not impaired but past
due
by the following
amounts
|
|
|
|
>30
days
|
>60
days
|
>90
days
|
>120
days
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Group: Trade and other
receivables
|
685
|
57
|
36
|
5
|
77
|
|
Company: Trade and other
receivables
|
1,095
|
-
|
-
|
-
|
-
|
Financial assets past due but not
impaired as at 31 December 2021:
|
|
Not impaired and not past
due
|
Not impaired but past
due
by the following
amounts
|
|
|
|
>30
days
|
>60
days
|
>90
days
|
>120
days
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Group: Trade and other
receivables
|
227
|
14
|
8
|
16
|
22
|
|
Company: Trade and other
receivables
|
1,207
|
-
|
-
|
-
|
-
|
Trade and other receivables above
exclude prepayments and accrued income.
The Group is exposed to credit
risk on its cash and cash equivalents, trade and other receivables.
The maximum exposure to credit risk is represented by the carrying
value of each financial asset.
Credit risk with respect to cash
is reduced through maintaining banking relationships with
established financial intermediaries with acceptable credit
ratings. Bank deposits as at 31 December 2022 were £291,000 (2021:
£211,000), all of which are considered of low credit
risk.
Credit risk with respect trade and
other receivables Is reduced through assessing all material new
clients for credit risk prior to entering into a contractual
relationship. All trade and other receivables are assessed
regularly for credit risk and those which are past due by 90 days
or more and where there has been a breakdown of communication with
the client such that there is no longer confidence that the sum
will be collectable are impaired to the extent that they are no
longer expected to be collectable.
Group trade and other receivables
excluding prepayments and accrued income as at 31 December 2022
were £550,000 (2021: £287,000), all of which are collected and/or
collectable and are considered of low credit risk.
Market risk
a. Interest rate risk
The Group had two outstanding
interest-bearing loans (one with NatWest Bank PLC and one with
Coutts) and the HP Agreement with Close Leasing Limited at the year
end. The interest rates in respect of the HP Agreement and Coutts
loan are fixed and in respect of the loan from NatWest Bank PLC is
calculated in relation to bank Base Rate, there are no early
redemption penalties associated with the NatWest Bank PLC loan and
the risk is therefore considered to be insignificant.
b. Foreign currency risk
Although the Company is based in
the United Kingdom, a significant part of the Group's and Company's
operations are overseas, and the operating or functional currency
of a large part of the global business is in US Dollars, Euros and
South African Rand. As a result, the Group's sterling accounts can
be affected by movements in the US Dollar/Sterling, the
Euro/Sterling and the South African Rand/Sterling exchange
rates.
The foreign assets and liabilities
of the Group and Company are closely matched as at 31 December
2022. The table below sets out the carrying amounts of assets and
liabilities for the Group in their presentational currency (i.e.
Sterling) and a total impact for each 10% fluctuation in exchange
rates. Based on the carrying amounts of foreign assets and
liabilities as at 31 December 2022, for each 10% fluctuation in
exchange rates, net assets are expected to be impacted by £35,000
(2021: £11,000).
|
Year ended 31 December 2022
|
|
Carrying amount (sterling
equivalent)
|
Forex
Risk
|
|
|
£
|
$
|
€
|
R
|
Total
|
(-10%)
|
10%
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash
|
20
|
1
|
-
|
270
|
291
|
27
|
(27)
|
|
Trade and other
receivables
|
461
|
14
|
114
|
271
|
860
|
40
|
(40)
|
|
|
481
|
15
|
114
|
541
|
1,151
|
67
|
(67)
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Borrowings
|
1,330
|
-
|
-
|
-
|
1,330
|
-
|
-
|
|
Trade payables
|
1,040
|
354
|
78
|
211
|
1,683
|
64
|
(64)
|
|
Other payables
|
2,513
|
-
|
-
|
-
|
2,513
|
-
|
-
|
|
Lease liabilities
|
122
|
-
|
-
|
-
|
122
|
-
|
-
|
|
Other taxation and social
security
|
1,188
|
-
|
-
|
5
|
1,193
|
1
|
(1)
|
|
Accruals and deferred
income
|
851
|
-
|
-
|
385
|
1,236
|
39
|
(39)
|
|
|
7,044
|
354
|
78
|
601
|
8,077
|
104
|
(104)
|
|
|
|
|
|
|
|
|
|
|
Net Impact
|
|
|
|
|
|
37
|
(37)
|
|
Year ended 31 December 2021
|
|
Carrying amount (sterling
equivalent)
|
Forex
Risk
|
|
|
£
|
$
|
€
|
R
|
Total
|
(-10%)
|
10%
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash
|
(36)
|
1
|
-
|
246
|
211
|
25
|
(25)
|
|
Trade and other
receivables
|
390
|
14
|
12
|
96
|
512
|
12
|
(12)
|
|
|
354
|
15
|
12
|
342
|
723
|
37
|
(37)
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Borrowings
|
1,678
|
-
|
-
|
-
|
1,678
|
-
|
-
|
|
Trade payables
|
836
|
88
|
101
|
73
|
1,098
|
26
|
(26)
|
|
Other payables
|
275
|
-
|
-
|
-
|
275
|
-
|
-
|
|
Lease liabilities
|
188
|
-
|
-
|
-
|
188
|
-
|
-
|
|
Other taxation and social
security
|
1,265
|
-
|
-
|
-
|
1,265
|
-
|
-
|
|
Accruals and deferred
income
|
1,170
|
-
|
-
|
-
|
1,170
|
-
|
-
|
|
|
5,412
|
88
|
101
|
73
|
5,674
|
26
|
(26)
|
|
|
|
|
|
|
|
|
|
|
Net Impact
|
|
|
|
|
|
(11)
|
11
|
26. Lease
liabilities
|
|
Group
|
Company
|
|
|
2022
|
2021
|
2022
|
2021
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Current
|
72
|
66
|
-
|
-
|
|
Non-current
|
50
|
122
|
-
|
-
|
|
|
122
|
188
|
-
|
-
|
In 2019, a right of use asset,
being the present value of the operating lease payments over the
remaining life of the lease, was recognised. The right of use
assets and corresponding lease liability have been calculated using
a discount rate of 9%. The depreciation of the assets and interest
charge are recognised in the Statement of Comprehensive Income in
the year and the buildings maturity analysis of lease commitments
at 31 December 2022 is detailed below.
Lease payments relate to leases of
property. The Group does not have an option to purchase the leased
property at the expiry of the lease period.
|
Payments recognised as an expense
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Lease payments
|
-
|
-
|
|
Lease depreciation
|
62
|
62
|
|
Interest
|
14
|
19
|
|
Non-cancellable lease commitments
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Not later than 1 year
|
72
|
66
|
|
Later than 1 year and not later
than 5 years
|
50
|
122
|
|
Later than 5 years
|
-
|
-
|
|
|
122
|
188
|
26.1. Movement in lease liabilities in the financial
period
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
|
|
|
|
Opening balance
|
188
|
248
|
|
Payments made
|
(66)
|
(60)
|
|
Closing balance
|
122
|
188
|
27. Deferred tax
|
|
2022
|
2021 as
restated
|
|
|
£'000
|
£'000
|
|
At start of year
|
12
|
644
|
|
(Credited)/Charged to profit or
loss
|
(12)
|
(632)
|
|
At end of year
|
-
|
12
|
Due to the availability of UK tax
losses, subject to agreement with the HMRC, there is an estimated
deferred tax asset of £2,036,000 relating to UK trading losses of
£7,163,000 and other deductible temporary timing differences of
£981,000 (2021: £837,000 relating to trading losses of £3,350,000).
This is not recognised due to the uncertainty of the timing of
future taxable profits against which these losses could be
utilised.
Analysis of deferred
tax
|
|
2022
|
2021 as
restated
|
|
|
£'000
|
£'000
|
|
Accelerated capital
allowances
|
121
|
430
|
|
Tax losses carried
forward
|
(345)
|
(726)
|
|
Othe timing differences
|
224
|
308
|
|
|
-
|
12
|
28. Share capital
The issued share capital is set
out in the table below:
|
2022
|
2021
|
|
No. of shares
|
£'000
|
No. of shares
|
£'000
|
Issued and fully paid
|
|
|
|
|
Ordinary shares of 1p
|
242,569,604
|
2,426
|
159,802,147
|
1,598
|
Deferred shares of
51.8p
|
2,047,523
|
1,061
|
2,047,523
|
1,061
|
Deferred Ordinary shares of
0.5p
|
199,831,545
|
999
|
199,831,545
|
999
|
Deferred B shares of
£19.60
|
103,260
|
2,024
|
103,260
|
2,024
|
Total
|
|
6,509
|
|
5,682
|
The changes in the year to 1p
Ordinary shares, relating to the various capital transactions
during the year were as follows:
|
2022
|
|
Ordinary shares of 1p
|
No. of shares
|
£'000
|
At start of year
|
159,802,147
|
1,598
|
Settlement of supplier and
contractor fees (RNS Number: 2243B 11 February 2022)
|
6,223,859
|
62
|
Share placing (RNS Number 5879E 14
March 2022)
|
16,500,000
|
165
|
Share placing, settlement of
supplier and contractor fees (RNS Number 7666R 8 July
2022)
|
21,330,000
|
213
|
Shares issued on acquisition of
StART.Art (RNS Number 7666R 8 July 2022)
|
18,285,027
|
183
|
Exercise of warrants (RNS Number
1815I 12 April 2012)
|
1,428,571
|
14
|
Share placing (RNS Number 1651C 7
October 2022)
|
5,000,000
|
50
|
Settlement of acquisition (RNS
6855C 12 October 2022)
|
4,000,000
|
40
|
Share placing (RNS 8390G 18
November 2022)
|
10,000,000
|
100
|
At end of year
|
242,569,604
|
2,426
|
|
|
|
| |
|
2021
|
Ordinary shares of 1p
|
No. of shares
|
£'000
|
At start of year
|
108,138,544
|
1,081
|
Settlement of supplier and
contractor fees (RNS Number: 4882P 17 February 2021)
|
1,863,219
|
19
|
Share placing, settlement of
deferred consideration and contractor fees (RNS Number: 3348X
04 May 2021)
|
36,000,000
|
360
|
Loan conversion and settlement of
contractor fees (RNS Number: 1210F 14 July 2021)
|
1,114,668
|
11
|
Share placing, settlement of
deferred consideration and contractor fees (RNS Number: 9667V 17
December 2021)
|
12,685,716
|
127
|
|
|
|
At end of year
|
159,802,147
|
1,598
|
The number of additional shares
authorised for issue is 35,684,973 (2021:
60,314,284).
Deferred shares
The Company has 2,047,523 Deferred
shares of 51.8p each and 199,831,545 Deferred Ordinary shares of
0.5p each (together the 'Deferred shares') in issue. The Company
also has 103,260 Deferred B shares in issue.
The Deferred shares have the
following rights and restrictions. They shall:
a. Not entitle their
holders to receive any dividend or other distribution;
b. Not entitle their
holders to receive notice of or to attend, speak or vote at any
General Meeting of the Company by virtue of or in respect of their
holding of such Deferred shares; and
c. Entitle their holders
on a return of assets on a winding-up of the Company or otherwise
only to the repayment of the capital paid up on such Deferred
shares and only after repayment of the capital paid up on each
Ordinary share in the capital of the Company and the payment of a
further £100,000 on each such Ordinary share.
The holders of the Deferred shares
shall not be entitled to any further participation in the assets or
profits of the Company. Notwithstanding any other provision of
these Articles and unless specifically required by the provisions
of the Act, the Company shall not be required to issue any
certificates in respect of the Deferred shares. The Company shall
have irrevocable authority at any time:
a. to
appoint a person on behalf of any holder of Deferred shares to
enter into an agreement to transfer, and to execute a transfer of,
the Deferred shares, for no consideration, to such person (whether
or not an officer of the Company) as the Directors may determine as
the custodian thereof;
b. to
purchase all the Deferred shares then in issue in consideration of
an aggregate payment of one penny for all of such shares then
redeemed and upon giving 28 days' prior notice to the holders of
Deferred shares as to be redeemed fixing a time and place for
redemption; and
c. in the
event of any transfer, purchase or redemption to retain any share
certificate relating to such shares. If any Deferred shares are
purchased or redeemed as aforesaid, the relevant amount of
authorised but unissued share capital arising may be redesignated
by the Directors as Ordinary share capital.
Neither the passing by the Company
of any special resolution for the cancellation of the Deferred
shares for no consideration by means of a reduction of capital
requiring the confirmation of the Court nor the obtaining by the
Company nor the making by the Court of any Order confirming any
such 103 reduction of capital nor the becoming effective of any
such Order shall constitute a variation, modification or abrogation
of the rights attaching to the Deferred shares and accordingly the
Deferred shares may at any time be cancelled for no consideration
by means of a reduction of capital effected in accordance with the
Act without sanction or consent on the part of the holders of the
Deferred shares.
Ordinary shares
The Company has 242,569,604
ordinary shares which rank pari pasu and they are entitled the
holders to:
a. receive
any dividend or other distribution;
b. receive
notice of or to attend, speak or vote at any General Meeting of the
Company by virtue of or in respect of their holding of such shares;
and
c. a
return of assets on a winding-up of the Company or otherwise only
to the repayment of the capital paid up.
29. Share premium
|
2022
|
2021
|
|
£'000
|
£'000
|
At start of year
|
27,024
|
25,004
|
Premium arising on issue of equity
shares
|
1,647
|
1,486
|
Equity settled
liabilities
|
245
|
644
|
Share issue costs
|
(73)
|
(110)
|
At end of year
|
28,844
|
27,024
|
30. Acquisitions
In May 2021, the Company
subscribed to 389 ordinary shares in StART.Art', for a total cash
consideration of £1,000,000. In November 2021 StART.Art acquired
the entire issued share capital of Start (2013) Limited, the
promoter of the StART Art Fair, in an all share transaction,
resulting in a decrease in the Company's interest in the enlarged
group from 18.6% to 14.6% with no diminution of value. This was
done to consolidate the art business into one company and to
provide an established and respected art fair structure to support
the art website.
In December 2021, StART.Art issued
a further 180 ordinary shares to LVCG for nominal consideration
increasing LVCG's holding to 19.94%.
On 3 August, the Company acquired
the remaining 80.06% of StART.Art not already owned by the Group
from David Ciclitira and Ranjit Murugason.
Prior to 3 August 2022 the Company
did not exercise significant influence over StART.Art and the
Company's interest was included in Investments in Other Financial
Assets in the Consolidated Statement of Financial Position at 31
December 2021. The results of StART.Art have been consolidated from
the date of the acquisition of the remaining 80.06% resulting in
goodwill of £3,924,000 arising as detailed in note 18.
|
|
Book value of assets and
liabilities acquired
|
Fair value
adjustments
|
Fair value of assets and
liabilities acquired
|
|
|
£'000
|
£'000
|
£'000
|
|
Property, plant and
equipment
|
2
|
-
|
2
|
|
Intangible assets
|
115
|
-
|
115
|
|
Inventories
|
70
|
-
|
70
|
|
Trade and other
receivables
|
692
|
-
|
692
|
|
Cash and cash equivalents
|
12
|
-
|
12
|
|
Borrowings
|
(40)
|
-
|
(40)
|
|
Trade and other
payables
|
(572)
|
-
|
(572)
|
|
Goodwill
|
-
|
-
|
3,923
|
|
|
|
|
4,202
|
|
|
|
|
|
|
Satisfied by:
|
|
|
|
|
Cash on completion
|
|
|
120
|
|
Shares on completion
|
|
|
1,097
|
|
Deferred consideration (cash and
shares)
|
|
|
1,985
|
|
Fair value of previously held
interest
|
|
|
1,000
|
|
|
|
|
4,202
|
All trade and other receivables
have been settled in the course of 2023.
Consideration
comprised:
·
£120,000 cash
·
A total of 18,285,027 new ordinary shares in the
Company were issued in at 6p per share, with reference to the
Closing bid price per AIM market.
·
Deferred consideration of £1,985,000, to be
settled in cash or the issue of new ordinary shares in the Company
at the Company's discretion.
·
The fair value of previously held interest
approximated to carrying amount of £1m therefore no gain or loss
was recorded as part of acquisition.
Included in the consolidated
statement of comprehensive income in 2023 is revenue of
£657,000 and pre-tax profit of £99,000; if the business
combinations that occurred during the year had been as of the
beginning of the annual reporting period; Group revenue for the
year would have been of £4,929,000 and pre-tax loss attributable to
the owners of the parent Company would have been £9,392,000 in the
consolidated statements.
31. Share options and
warrants
Share option reserve
|
2022
|
2021
|
|
£'000
|
£'000
|
At start of year
|
515
|
496
|
Share option charge
|
327
|
223
|
Share options forfeited
|
(56)
|
(267)
|
Warrant charge
|
77
|
63
|
Warrant lapsed
|
(552)
|
-
|
At end of year
|
311
|
515
|
Share options
The Group adopted a share option
scheme on 2 April 2019 for certain directors and senior management.
Options are generally exercisable at a price equal to the market
price of the Plc shares on the day immediately prior to the date of
the grant. Options are forfeited if the employee leaves the Group
before the options vest.
The Share Option Plan provides for
the grant of both tax-approved Enterprise Management Incentives
(EMI) Options and unapproved options.
In April 2022 a total of 4,669,000
new options were granted to certain Directors, employees and
contractors with an exercise price of 5p per option, all other
options were forfeited as a condition of grant of the new
options.
The following Options were granted
to Directors:
|
|
Options Granted April
2022
|
|
|
No.
|
|
David Ciclitira
|
2,000,000
|
|
Bryan Lawrie
|
50,000
|
|
Maria Serena Papi
|
50,000
|
|
Ranjit Murugason
|
50,000
|
|
Stephen Birrell
|
50,000
|
|
|
2,200,000
|
The inputs into the option pricing
model for the options issued in the year are:
Weighted average exercise
price
5p
Expected
volatility
73%
Expected
life
1 year
Risk free interest
rate
1.3%
Expected
dividends
0.00
No options were issued in
2021.
The option charge for the year
ended 31 December 2022 was £264,000 (2021: £223,000).
Details of the share options
outstanding during the year are as follows.
|
|
2022
|
2021
|
|
|
Number
|
Weighted average exercise
price (p)
|
Number
|
Weighted average exercise
price (p)
|
|
Outstanding at the beginning of
the year
|
1,744,457
|
65
|
3,086,346
|
65
|
|
Granted during the year
|
4,669,000
|
05
|
-
|
-
|
|
Forfeited during the
year
|
(1,744,457)
|
65
|
(1,341,889)
|
65
|
|
Exercised during the
year
|
-
|
-
|
-
|
-
|
|
Outstanding at the end of the year
|
4,669,000
|
05
|
1,744,457
|
65
|
Options become exercisable on the
first anniversary of the grant date and lapse on the tenth
anniversary of the grant date. All options currently outstanding
were granted on 26 April 2022.
Advisor and creditor warrants
No Advisor Warrants were issued in
the year (2021: 1,500,000 at a weighted average exercise price of
5p)
The charge for the year ended 31
December 2022 for the advisor and creditor warrants in issue totals
£77,000 (2021: £63,000).
A total of 1,500,000 advisor and
creditor warrants were outstanding at 31 December 2022 (2021:
2,213,941).
Investor warrants
10,500,000 (2021: 11,428,572)
investor warrants were issued to investors as part of an equity
raise and are therefore outside the scope of IFRS 2 'Share-based
payment' and consequently there is no share-based payment charge in
respect of these warrants.
During the year 16,810,000 (2021:
3,903,840) investor warrants expired and 1,428,571 (2021: nil) were
exercised leaving a total of 20,500,001 investor warrants
outstanding at 31 December 2022 (2021: 28,238,572).
|
|
2022
|
|
2021
|
|
|
Warrants
|
Number
|
Weighted average exercise
price (p)
|
Number
|
Weighted average exercise
price (p)
|
|
Outstanding at the beginning of
the year
|
30,452,513
|
8.44
|
21,427,781
|
24.66
|
|
Issued during the year
|
10,500,000
|
8.00
|
12,928,572
|
5.00
|
|
Expired during the year
|
(17,523,941)
|
10.98
|
(3,903,840)
|
15.00
|
|
Exercised during the
year
|
(1,428,571)
|
5.00
|
-
|
-
|
|
Outstanding at the end of the year
|
22,000,001
|
6.43
|
30,452,513
|
8.44
|
Details of all warrants
outstanding during the year are as follows.
|
|
31 December
2022
|
31 December
2021
|
|
|
Number
|
Price (p)
|
Number
|
Price (p)
|
|
Investor (exercisable up to 25
February 2021)
|
-
|
-
|
-
|
-
|
|
Adviser (exercisable up to 25
February 2022)*
|
-
|
-
|
50,000
|
15.00
|
|
Investor (exercisable up to 25 June
2022)**
|
-
|
-
|
4,000,000
|
10.00
|
|
Adviser (exercisable up to 25 June
2022)**
|
-
|
-
|
75,000
|
10.00
|
|
Creditor (exercisable up to 17
October 2022)
|
-
|
-
|
356,923
|
38.79
|
|
Investor (exercisable up to 3
December 2022)
|
-
|
-
|
12,810,000
|
10.00
|
|
Creditor (exercisable up to 16
December 2022)
|
-
|
-
|
232,018
|
38.79
|
|
Adviser (exercisable up to 24 May
2023)
|
1,500,000
|
5.00-
|
1,500,000
|
5.00
|
|
Investor (exercisable up to 23
December 2023)
|
10,000,001
|
5.00-
|
11,428,572
|
5.00
|
|
Investor (exercisable up to 28 July
2024)
|
10,500,000
|
8.00
|
|
|
|
|
|
|
|
|
|
|
22,000,001
|
6.43
|
30,452,513
|
8.44
|
*repriced from 80p to 15p in May
2021.
**repriced from 15p to 10p in May
2021.
32. Capital
management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern, so that it can continue to provide returns to
shareholders and benefits for other stakeholders. The Group had net
liabilities of £83,000 at 31 December 2022 (2021: £5.4m net
assets). The Group's capital management strategy is to retain
sufficient working capital for day-to-day operating requirements
and to ensure sufficient funding is available to meet commitments
as they fall due and to support growth. There are no externally
imposed capital requirements.
|
|
2022
|
2021
|
|
|
£'000
|
£'000
|
|
Loan facility
|
(1,330)
|
(1,678)
|
|
Total debt
|
(1,330)
|
(1,678)
|
|
Cash
|
291
|
211
|
|
Net debt
|
(1,039)
|
(1,467)
|
In order to maintain or adjust the
capital structure the Group may issue new shares or sell assets to
reduce debt.
33. Related party
transactions
Details of the Directors'
remuneration and consultancy fees are disclosed in Note 10,
including £30,000 (2021: £17,000) paid to CFO Partners Ltd., a
company under the control of Bryan Lawrie and £13,000 (2021:
£15,000) paid to Ossian Energy Limited, a company under the control
of Stephen Birrell for consultancy services.
David Ciclitira
David Ciclitira injected funds into
the Company during the year as follows:
|
2022
|
2021
|
£'000
|
£'000
|
Acquisition of StART.Art settled in
shares
|
1,061
|
-
|
Loan converted to
equity
|
-
|
30
|
Acquisition of LCSE settled in
shares
|
-
|
200
|
Total funds injected
|
1,061
|
230
|
David Ciclitira received payments
during the year as set out below:
|
2022
|
2021
|
£'000
|
£'000
|
Consultancy fees
|
250
|
|
Salary
|
25
|
|
Healthcare costs
|
14
|
14
|
Fees and interest at 16.2% in
relation to the provision of loan facility detailed in Note
23.
|
12
|
22
|
Fees in relation to HP Agreement
guarantee
|
-
|
21
|
Consideration for the purchase of
StART.Art settled in shares
|
1,061
|
-
|
Consideration for the purchase of
share in EMPL
|
-
|
113
|
Consideration for the purchase of
share in EMHL
|
45
|
-
|
Consideration for the purchase of
LCSE, settled in shares
|
-
|
200
|
|
|
1,407
|
370
|
Loan repaid
|
|
|
Loan converted to
equity
|
-
|
30
|
Loan repaid
|
90
|
174
|
|
90
|
204
|
|
|
|
Total payments received
|
90
|
574
|
Ranjit Murugason
|
Ranjit Murugason received payments during the year as set out
below:
|
2022
|
2021
|
£'000
|
£'000
|
Acquisition of StART.Art of which £36,000
settled in shares
|
156
|
-
|
Total funds injected
|
156
|
-
|
Unpaid balances due to related
parties at 31 December
|
2022
|
2021
|
|
£'000
|
£'000
|
David Ciclitira*
|
559
|
205
|
Serenella Ciclitira
|
48
|
28
|
Ranjit Murugason**
|
200
|
127
|
Bryan Lawrie
|
35
|
24
|
Stephen Birrell
|
14
|
16
|
|
856
|
400
|
*Includes deferred consideration
of £355,000 (2021: £100,000) in relation to the acquisition of
David Ciclitira's interest in StART.Art and EMHL (2021: EMHL), and
the outstanding loan balance of £nil (2021: £90,823) as detailed in
Note 23.
*Includes deferred consideration
of £200,000 (2021: £nil) in relation to the acquisition of Ranjit
Murugason's interest in StART.Art
Unpaid balances due from related
parties at 31 December
|
2022
|
2021
|
|
£'000
|
£'000
|
Parallel Contemporary Art
Ltd
|
65
|
-
|
E-Movement (PTY) Ltd
|
118
|
67
|
|
183
|
67
|
Subsidiary undertakings and associates
During the year the Company
provided and received services to other Group companies
totalling:
Services provided by the Company
to:
|
2022
|
2021
|
|
£'000
|
£'000
|
Brick Live International
Limited
|
66
|
90
|
K-Pop Europa Limited
|
219
|
-
|
|
285
|
90
|
|
|
|
Services received by the Company
from:
|
|
|
Brick Live International
Limited
|
166
|
102
|
Start Art Global Ltd
|
120
|
-
|
|
286
|
102
|
During the year the Live Company
Sports and Entertainment (Pty) Limited provide services to
E-Movement (PTY) Ltd totalling £218,000 (2021: £164,000)
Services provided by the Company
to:
|
2022
|
2021
|
|
£'000
|
£'000
|
Brick Live International
Limited
|
66
|
90
|
K-Pop Europa Limited
|
219
|
-
|
|
285
|
90
|
|
|
|
Services received by the Company
from:
|
|
|
Brick Live International
Limited
|
166
|
102
|
Start Art Global Ltd
|
120
|
-
|
|
286
|
102
|
Unpaid balances due to/(from)
subsidiary undertakings and associates
|
2022
|
2021
|
£'000
|
£'000
|
Brick Live Group
Limited
|
65
|
65
|
Bright Bricks Limited
|
(532)
|
(521)
|
Brick Live International
Limited
|
(256)
|
(593)
|
K-Pop Europa Limited
|
21
|
(41)
|
Live Company Group EBT
Limited
|
206
|
152
|
Start Art Global Limited
|
308
|
-
|
|
188
|
(938)
|
Investments
In May 2021, the Company
subscribed to 389 ordinary shares in Start Art Global Limited.
('StART.Art'), representing a non-controlling stake of 18.6% of the
total issued share capital of the company, for a total
consideration of £1,000,000. Prior to the transaction StART.Art was
100% owned by David Ciclitira and Ranjit Murugason who are both
directors of the Company.
In November 2021 StART.Art
acquired the entire issued share capital of Start (2013) Limited,
the promoter of the StART Art Fair, in an all share transaction,
resulting in a decrease in the Company's interest in the enlarged
group from 18.6% to 14.6% with no diminution of value. Prior to the
acquisition Start (2013) Limited was 100% owned by David Ciclitira
and Ranjit Murugason who are both directors of the
Company.
In December 2021, following a
reorganisation of the capital structure of StART.Art, StART.Art
issued a further 180 ordinary shares to
LVCG for nominal consideration increasing LVCG's holding to
19.9%.
In July 2022, the remaining 80.1%
of StART. Art was acquired by the group for a consideration of
£3,202,243 from David Ciclitira and Ranjit Murugason consisting of
a mixture of cash and shares.
In November 2021, the Company
purchased 271 ordinary shares, representing 20% of the total issued
share capital, in E-Movement (PTY) Limited ('EMPL') from David
Ciclitira for a total consideration of £113,460. These shares were
originally purchased by David Ciclitira (acting in his personal
capacity) for the same amount in anticipation of them being
transferred to the Company.
34. Subsidiaries
At 31 December 2022, the Company
had the following (direct and indirect) subsidiaries:
Held directly
|
Company number
|
Place of incorporation
|
% owned
|
Principal activities
|
Brick Live Group
Limited
|
10151705
|
UK
|
100%
|
Holding Company
|
Bright Bricks Ltd
|
07227540
|
UK
|
100%
|
Specialist production
company
|
Live Company Group EBT
Limited
|
12792192
|
UK
|
100%
|
Employee Benefit Trust
Company
|
Parallel Live Group
Limited
|
09932658
|
UK
|
100%
|
Holding Company
|
Live Company Sports Ltd
|
12328268
|
UK
|
100%
|
Holding Company
|
E Movement Holdings
Limited
|
12502990
|
UK
|
100%
|
Holding Company
|
Start Art Global Limited
|
13113084
|
UK
|
100%
|
StART.Art online
platform
|
KPOP Lux Limited
|
14132899
|
UK
|
100%
|
Holding Company
|
KPOP.Flex Limited
|
11671096
|
UK
|
100%
|
Holding Company
|
Championship (Singapore) Pte
Limited
|
201427355K
|
Singapore
|
95%
|
Dormant
|
|
|
|
|
|
Held indirectly
|
|
|
|
|
Brick Live Far East
Limited
|
10308158
|
UK
|
100%
|
Dormant
|
Brick Live Far East
Limited
|
2460460
|
Hong Kong
|
100%
|
Owner of Associate investment in
China
|
Brick Live International Limited
|
10257756
|
UK
|
100%
|
BRICKLIVE events
|
Parallel Live (NY) LLC
|
6339763
|
USA
|
100%
|
Dormant
|
Live Company Sports and
Entertainment (Pty) Limited
|
2020/765082/07
|
South Africa
|
100%
|
Sports and entertainment
events
|
K-Pop Europa Limited
|
12924203
|
UK
|
50%
|
KPOP events
|
Start (2013) Limited
Start Global Limited
Start TV Limited
Start Art Productions
Limited
|
08564914
12433013
13294855
13461711
|
UK
UK
UK
UK
|
100%
100%
100%
100%
|
StART.Art art fairs
Dormant
Dormant
Dormant
|
Start Luxury Group Limited
|
14057781
|
UK
|
100%
|
Dormant
|
K. Flex Enterprises Limited
|
14135025
|
UK
|
100%
|
Dormant
|
K. Flex Asia Limited
|
14136666
|
UK
|
100%
|
Dormant
|
K. Flex Americas Limited
|
14134940
|
UK
|
100%
|
Dormant
|
E Movement Holdings (Pty)
Limited
|
2021/354354/07
|
South Africa
|
100%
|
Formula E events
|
|
|
|
|
|
In December 2020, the Company
acquired the entire issued share capital of Live Company Sports and
Entertainment Limited including its 50% interest in K-Pop Europa
Limited (KPE).
At the time of acquisition the
Directors concluded, by virtue of David Ciclitira being the sole
director of KPE and was thus able to direct its activities, that
KPE should be consolidated as a subsidiary in accordance with IFRS
10. The directors continued to assess signifiers of control during
the year ended 31 December 2022 and concluded that the criteria for
consolidation continued throughout the year.
Bright Bricks 2020 Limited was
dissolved in March 2023.
The registered office of the
subsidiaries incorporated is England and Wales is 3 Park Court
Pyrford Road, West Byfleet, Surrey, KT14 6SD.
The registered office of the
overseas subsidiaries are as follows:-
Championship (Singapore) Pte
Limited, 62 Neil Road, Singapore (088833).
Brick Live Far East Limited, RM
1307A 13/F, Two Harbourfront, 22 Tak Fung Street, Hughom, Hong
Kong.
Parallel Live ((NY) LLC, 800 N
King St, Suite 303, Wilmington, DE 19801, USA
E Movement Holdings (Pty) Limited,
9 Viscount Crescent, Baronetcy Estate, Plattekloof, Western Cape,
7500, South Africa.
Live Company Sports and
Entertainment (Pty) Limited, Noland House, River Park, Mowbray,
Western Cape, South Africa.
The company's subsidiaries Brick
Live Group Limited, Parallel Live Group Limited, Brick Live
International Limited, and Live Company Group EBT Limited are
exempt from the requirements of the Companies Act 2006 relating to
the audit of their individual accounts by virtue of section 479A of
the Companies Act 2006.
35.
Events after the
Year End
In January 2023 the Group signed
an agreement with Seoul Broadcasting System ('SBS') to create a
K-Pop concert in Madrid in July 2023, and a 2-day K-Pop festival in
London during September 2023. Revenue for the Group is derived from
several sources: ticket sales, merchandising, sponsorship, and
streaming.
In February 2023 the Group
licenced the StART Art name worldwide for use in an art based
blockchain product ("Coin"). Under the terms of the agreement an
annual licence fee of £500,000 is payable to LVCG on 1 August in
each year of the term. The fee is split between a £300,000 cash
element (payable on 1 August 2023) with the option, at the
Company's discretion, to receive the remaining fee of £200,000 on
or before 1 September 2023, in cash or Coins.
In February 2023 the Company took
out a short-term prepayment facility with Riverfort Global
Opportunities PCC Limited ("the facility") for £500,000 of which an
initial prepayment of £200,000 was received.
In February 2023 LCSE organised
the Cape Town Formula E race and the Cape Town stopover of the
Global Ocean Race, which included a week of sustainability
events.
In February 2023 the Group signed
a new agreement with a branding and promotional business Birdman
Inc. to collaborate on the staging and promotion of an annual K-Pop
concert to take place in Nagoya, Japan Revenue for the Group is
derived form a $1,000,000 licence fee, merchandising, sponsorship,
streaming and profit share.
In March 2023 several long-term
existing shareholders subscribed for a total of 9,975,000 new
ordinary shares of 1p each at a price of 2p per share and certain
warrants issued in 2021 and 2022 were rebased to have an exercise
price of 3.5p per ordinary share raising a total of
£200,000.
In May 2023 the Group sold two
existing underperforming BRICKLIVE tours, Mythical Beasts and Outer
Space, for £350,000 in staged payments between July and October
2023.
In August 2023, the KPOP LUX Super
Concert London scheduled for 22-24 September 2023 was
postponed.
In September 2023 Maria Serena
Papi resigned as a director of Live Company Group plc.
During the last quartile of 2023,
the Company undertook a cost reduction and cash preservation
exercise with staff numbers cut and salaries reduced where
appropriate.
David Ciclitira has agreed to
provide a £1,200,000 two-year convertible loan note to the Company,
of which £570,000 has already been advanced to settle certain
liabilities as they fall due. The convertible loan note is classified as a Related Party
transaction under AIM Rules for Companies (the 'AIM
Rules'). The terms of the convertible
loan note are to be agreed by the independent directors and
announced separately in due course.
The Non-Executive Directors,
including Maria Serena Papi, have agreed to convert their
outstanding director fees totalling £221,193 into new ordinary
shares at 0.03p. In addition, other creditors totalling
£860,080 have agreed to convert into new ordinary shares at
0.03p. Further discussions with creditors to convert
their outstanding balances into new ordinary shares at 0.03p are
on-going.
The Company has agreed with David
Ciclitira and Ranjit Murugason, as original owners of Start Art
Global Limited ("StartArt"), to cancel the acquisition of the
80.06% of Start Art as announced on 8 July 2022 in return for the
cancellation of all amounts owing to the being up to an aggregate
of £500,000 in cash and £519,800 in Ordinary Shares, with the
Company retaining a 19.94% interest. The StART.Art disposal
is classified as Related Parties under AIM Rules for Companies (the
'AIM Rules'). The Company intends to seek approval from
shareholders at a General Meeting during the first quarter of 2024,
details of which will be provided in due course. The General
Meeting circular will provide all information with regards to the
Related Parties and the opinion of the independent director and the
Company's Nominated Adviser, Beaumont Cornish Limited. Any
changes in the goodwill will be reflected in the Annual Report and
Accounts for the Company ending 31 December 2023.
The Company is also in advanced
negotiations with a cornerstone investor who intends to invest in
LVCG in a two stage process. The first being a £1.5m loan and the
second being a potential equity investment in the Company.
Negotiations while advanced are ongoing and there can be no
guarantee that these will conclude.
A placing for a £500,000 equity
placement has been agreed with the Company's broker, CMC
Markets. Final details will be communicated to shareholders
on conclusion of this placing.
36.
Prior Year
Adjustments
Group
During the year the Directors
reviewed the way VAT is accounted on certain transactions in the
period prior to February 2021 which could result in a one-off
charge of £243,000, this resulted in an increase in the current
liabilities previously reported in the Consolidated Statement of
Financial Position at 31 December 2020 from £1,120,000 to
£1,346,000, and an increase in the current liabilities previously
reported in the Consolidated Statement of Financial Position at 31
December 2021 from £1,172,000 to £1,415,000.
During the year the Directors
reviewed the way deferred tax losses were offset against deferred
tax liability this resulted in a reduction in the deferred tax
liability previously reported in the Consolidated Statement of
Financial Position at 31 December 2021 from £761,000 to £12,000.
There was no impact on this adjustment on the Consolidated
Statement of Financial Position at 31 December 2020.
In respect of the Consolidated
Statement of Comprehensive Income for the year ended 31 December
2021 as previously reported the following describes the impact of
the above adjustments on each affected line item:
|
|
Previously
reported
|
VAT
adjustment
|
Deferred tax
adjustment
|
As
restated
|
|
|
31 December
2021
|
|
|
31 December
2022
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Administrative expenses
|
(3,244)
|
(17)
|
-
|
(3,261)
|
|
Operating loss
|
(3,208)
|
(17)
|
-
|
(3,225)
|
|
Loss for year before tax
|
(3,316)
|
(17)
|
-
|
(3,333)
|
|
Taxation
|
(61)
|
-
|
749
|
688
|
|
Loss for the year
|
(3,377)
|
-
|
749
|
(2,645)
|
|
Total comprehensive loss
|
(3,377)
|
-
|
749
|
(2,645)
|
|
Loss per share
|
(2.6p)
|
-
|
0.6
|
(2.0p)
|
In respect of the Consolidated
Statement of Financial Position at 31 December 2021 as
previously reported the following describes the impact of the above
adjustments on each affected line item:
|
|
Previously
reported
|
VAT
adjustment
|
Deferred tax
adjustment
|
As
restated
|
|
|
31 December
2021
|
|
|
31 December
2022
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Accruals and deferred
income
|
1,172
|
243
|
|
1,415
|
|
Total current liabilities
|
4,351
|
243
|
|
4,594
|
|
Net current
assets/(liabilities)
|
177
|
(243)
|
|
(66)
|
|
Deferred tax liability
|
761
|
-
|
(749)
|
12
|
|
Total non-current liabilities
|
2,084
|
-
|
(749)
|
1,335
|
|
Net
assets
|
5,422
|
(243)
|
749
|
5,928
|
|
Accumulated losses
|
(21,496)
|
(243)
|
749
|
(20,990)
|
|
Total equity
|
5,422
|
(243)
|
749
|
5,928
|
Company
During the year the Directors
reviewed the way VAT is accounted on certain transactions in the
period prior to February 2021 which could result in a one-off
charge of £243,000, this resulted in an increase in the current
liabilities previously reported in the Company Statement of
Financial Position at 31 December 2020 from £1,362,000 to
£1,346,000, and an increase in the current liabilities previously
reported in the Company Statement of Financial Position at 31
December 2021 from £1,362,000 to £1,605,000.
During the year the Directors
reviewed the way deferred tax losses were offset against deferred
tax liability this resulted in a reduction in the deferred tax
liability previously reported in the Consolidated Statement of
Financial Position at 31 December 2021 from £359,000 to £nil. There
was no impact on this adjustment on the Consolidated Statement of
Financial Position at 31 December 2020.
In respect of the Company
Statement of Financial Position at 31 December 2021 as
previously reported the following describes the impact of the above
adjustment on each affected line item:
|
|
Previously
reported
|
VAT
adjustment
|
Deferred tax
adjustment
|
As
restated
|
|
|
31 December
2021
|
|
|
31 December
2022
|
|
|
£'000
|
£'000
|
£'000
|
|
|
Accruals and deferred
income
|
336
|
243
|
-
|
579
|
|
Total current liabilities
|
1,362
|
243
|
-
|
1,605
|
|
Net current
assets/(liabilities)
|
(32)
|
243
|
-
|
(275)
|
|
Deferred tax
|
359
|
-
|
(359)
|
-
|
|
Net
assets
|
11,435
|
(243)
|
359
|
11,551
|
|
Accumulated losses
|
(41,849)
|
(243)
|
359
|
(41,733)
|
|
Total equity
|
11,435
|
(243)
|
359
|
11,551
|
The Company's result for the year
ended 31 December 2021 was previously reported as a profit of
£1,404,000 and was increased to £1,745,000 by virtue of an increase
of £359,000 by virtue of the deferred tax adjustment and a
reduction of £17,000 due to the VAT adjustment.
Enquiries:
|
Live Company Group Plc
David Ciclitira, Executive
Chairman
Sarah Dees, Chief Operating
Officer
|
Tel: 020
7225 2000
|
|
|
|
|
Beaumont Cornish Limited (Nominated
Adviser)
Roland Cornish/Rosalind Hill
Abrahams
|
Tel: 020
7628 3396
|
|
|
|
|
CMC Markets (Broker)
Thomas Smith
|
Tel: 020
7392 1436
|
About Live Company Group
Live Company Group Plc ("LVCG", the
"Company" or the "Group") is a live events, entertainment and
sports events Company, that has been trading on AIM since
2017.
The Group is divided into four
divisions:
· BRICKLIVE - consisting of a network of partner-driven
fan-based and touring shows using BRICKLIVE created content
worldwide. The Company owns the rights to BRICKLIVE - an
interactive experience built around the creative ethos of the
world's most popular construction toy bricks. The Group is an
independent producer of BRICKLIVE and is not associated with the
LEGO Group.
· LVCG
owns the brand KPOP Lux and is the Executive Producer of KPOP
Lux.
· StART
Art Global (SAG) - SAG owns StART Art Fair in London which has been
staged over the last 10 years at the Saatchi Gallery. SAG has
licensed the rights to the StART brand in Korea. The licence
includes the right to create and run StART Art Fair Seoul and
various StART+ exhibitions.
· Live
Company Sports and Entertainment (LCSE) - LCSE owns LCSE Pty in
South Africa.
LVCG is a founder shareholder in
E-Movement - the promoter of the Formula E Race in Cape Town. As
part of this relationship E-Movement has retained LCSE (through
E-Movement holdings) as its implementation partner. E-Movement
Holdings a 100% subsidiary of Live Company Group has the right to
sell sponsorship for the Formula E race in Cape Town.
IMPORTANT
NOTICES
Neither this Announcement, nor any
copy of it, may be taken or transmitted, published or distributed,
directly or indirectly, in or into the United States, Australia,
Canada, Japan, New Zealand, the Republic of Ireland or the Republic
of South Africa or to any persons in any of those jurisdictions or
any other jurisdiction where to do so would constitute a violation
of the relevant securities laws of such jurisdiction. This
Announcement is for information purposes only and does not
constitute an offer to sell or issue, or the solicitation of an
offer to buy, acquire or subscribe for any shares in the capital of
the Company in the United States, Australia, Canada, Japan, New
Zealand, the Republic of Ireland or the Republic of South Africa or
any other state or jurisdiction in which such offer or solicitation
is not authorised or to any person to whom it is unlawful to make
such offer or solicitation. Any failure to comply with these
restrictions may constitute a violation of securities laws of such
jurisdictions. The securities referred to in this Announcement
have not been, and will not be, registered under the US Securities
Act of 1933, as amended (the "US Securities Act"), or with any
securities regulatory authority of any state or jurisdiction of the
United States, or under any securities laws of any state or other
jurisdiction of the United States and may not be offered, sold,
resold, pledged, transferred or delivered, directly or indirectly,
in or into the United States except pursuant to an applicable
exemption from, or in a transaction not subject to, the
registration requirements of the US Securities Act and, in each
case, in compliance with the securities laws of any state or other
jurisdiction of the United States.
Beaumont Cornish Limited
("Beaumont Cornish") is the Company's Nominated Adviser and is
authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its
responsibilities under the AIM Rules for Companies and AIM Rules
for Nominated Advisers, are owed solely to the London Stock
Exchange. Beaumont Cornish is not acting for and will not be
responsible to any other persons for providing protections afforded
to customers of Beaumont Cornish nor for advising them in relation
to the proposed arrangements described in this announcement or any
matter referred to in it.
Cautionary
Statements
This Announcement may contain and
the Company may make verbal statements containing "forward-looking
statements" with respect to certain of the Company's plans and its
current goals and expectations relating to its future financial
condition, performance, strategic initiatives, objectives and
results. Forward-looking statements sometimes use words such as
"aim", "anticipate", "target", "expect", "estimate", "intend",
"plan", "goal", "believe", "seek", "may", "could", "outlook" or
other words of similar meaning. By their nature, all
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances which are beyond the
control of the Company. As a result, the actual future financial
condition, performance and results of the Company may differ
materially from the plans, goals and expectations set forth in any
forward-looking statements. Any forward-looking statements made in
this Announcement by or on behalf of the Company speak only as of
the date they are made. The information contained in this
Announcement is subject to change without notice and except as
required by applicable law or regulation (including to meet the
requirements of the AIM Rules, MAR, the Prospectus Regulation Rules
and/or FSMA), the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this Announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statements are based. Statements contained in this
Announcement regarding past trends or activities should not be
taken as representation that such trends or activities will
continue in the future. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
Announcement.
No statement in this Announcement
is intended to be a profit forecast and no statement in this
Announcement should be interpreted to mean that earnings per share
of the Company for the current or future years would necessarily
match or exceed the historical published earnings per share of the
Company. Any indication in this Announcement of the price at which
ordinary shares have been bought or sold in the past cannot be
relied upon as a guide to future performance.
This Announcement does not
identify or suggest, or purport to identify or suggest, the risks
(direct or indirect) that may be associated with an investment in
the Placing Shares. Any investment decisions to buy Placing Shares in the Placing must
be made solely on the basis of publicly available information,
which has not been independently verified by the Sole
Bookrunner.
The Offer Shares to be issued
pursuant to the Capital Raise will not be admitted to trading on
any stock exchange other than AIM.
Neither the content of the
Company's website (or any other website) nor the content of any
website accessible from hyperlinks on the Company's website (or any
other website) is incorporated into or forms part of this
Announcement.