TIDMSAL
RNS Number : 0160O
SpaceandPeople PLC
30 September 2019
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
SpaceandPeople plc
30 September 2019
SpaceandPeople plc
("SpaceandPeople" or the "Group")
Interim Results for the 6 months to 30 June 2019
SpaceandPeople (AIM:SAL), the retail, promotional and brand
experience specialist which facilitates and manages the sale of
promotional and retail merchandising space in shopping centres and
other high footfall venues, announces interim results for the six
months ended 30 June 2019.
Highlights
Financial
o Consolidated net revenue broadly flat at GBP3.8m (H1 2018:
GBP3.8m)
o UK promotional revenue increased GBP0.3m (20%) to GBP1.8m
o German retail revenue decreased GBP0.2m (35%) to GBP0.5m
o Group loss before taxation GBP0.04m (H1 2018: loss GBP0.09m)
- improved by GBP0.05m.
o Net cash outflow from operating activities GBP0.2m (H1 2018:
outflow GBP1.7m)
o Net cash of GBP0.56m (June 2018: GBP0.51m)
o Basic loss per share 0.14p (H1 2018: loss per share 0.40p)
Operational
o Average number of Mobile Promotions Kiosks ("MPKs") in operation
increased to 64 (H1 2018: 49)
o Average number of UK Retail Merchandising Units ("RMUs")
in operation decreased to 56 (H1 2018: 60)
o Average number of German RMUs in operation decreased to 48
(H1 2018: 74)
o Gained ISO 9001, 14001 & 45001 accreditation
Contact details:
SpaceandPeople Plc 0845 241 8215
Matthew Bending, Gregor Dunlay
Cantor Fitzgerald Europe 020 7894 7000
David Foreman, Will Goode
Chief Executive's Interim Operating Statement
I am happy to present the Group's interim results for 2019.
Overall the numbers are quite similar to the same period last year,
however, there have been significant movements in some divisions
both positive and negative. The UK saw improvements in Brand
Experience activity, but this was countered by a delayed roll out
of German RMUs in the first half. New promotional and retail
clients in the UK in the first half year have complemented a solid
performance overall.
UK
Promotions
Unlike the first half of 2018, UK experiential sales were not
affected by the football World Cup and very hot start to the
summer. However, the way brands spent their money started to evolve
with more brands using our clients' spaces for promotion, but
utilising them for fewer days and at fewer locations to leverage
their activities with social media. We therefore worked hard to
deliver more bookings to achieve similar overall revenue. In this
context, the 20% increase in UK promotions revenue to GBP1.8m was
particularly pleasing. We also observed a movement away from
"dramatic installation" PR led activity, to sampling and
subscription sign ups. Agencies are increasingly using our clients'
demographic data and footfall statistics to target locations more
specifically. This is all symptomatic of their sophisticated
strategic thinking in using experiential marketing as a channel to
market. We believe that we have unrivalled resources and expertise
in this market to manage this evolution. Revenue from operators
selling food-to-go and leisure services such as hair dressing and
beauty salons has been resilient despite the well documented
pressures on the UK retail market overall. Spending has been
increasing in retail parks which has mitigated the fall in shopping
centre business and demand for our services in this challenging
environment has never been as buoyant.
A notable new initiative in the UK has been the creation of
"Activate!". The genesis of this programme was Network Rail seeking
not just revenues from commercialisation, but wanting to bring
educational, cultural and enlightening activities into their
concourses. We identified the opportunity and have delivered a
programme which has seen institutions such as the Imperial War
Museum, Southbank Centre, National Army Museum and Art Academy
London undertaking activities that engage rail commuters with
interactive events. We anticipate growing this further in 2020 and
see this as an important and unique offering for Network Rail
demonstrating our keen eye for evolving our offer to meet customer
needs.
Retail (MPK & RMU)
In the first half of 2019 we had 64 MPKs in locations throughout
the UK (2018: 49 MPKs). This increase was due to the roll-out of
MPKs throughout the Hammerson portfolio of shopping centres,
however, revenue from these kiosks was lower than in the previous
half year at GBP883k (H1 2018: GBP947k) due to a reduction in the
average revenue achieved by each kiosk. We don't expect to see
revenue from this source picking up sufficiently in the second half
of the year to make up this shortfall.
The average number of RMUs in operation in the first half of
2019 decreased to 56 (H1 2018: 60) as they were removed from venues
at the end of their contracts. As a result of this, revenue from
RMUs fell slightly in the first half year.
Overall UK retail revenue fell by GBP0.1m (6%) compared with the
first half of 2018 as a result of the reduction in RMU numbers and
MPK average revenue.
ISO Accreditation
The whole UK team worked hard to attain ISO 9001, 14001 and
45001 accreditation for Quality Management Systems, Environmental
Management and Occupational Health and Safety which were awarded in
July this year. This shows the market our diligence in ensuring
that not only do we deliver sales but that they are managed safely
and conscientiously.
Germany
In Germany, we had a difficult first half of the year with RMU
numbers below our expectations and as a result revenue was down 35%
compared to the first half of 2018. However, we are now seeing a
significant increase in demand for RMUs which will help recover our
position to an extent for 2019 and deliver strong revenue in 2020.
ECE/MEC, historically our major client, reduced the number of RMUs
in operation in the first half of 2019 to 48 units, the lowest
number of units we have operated with them. This has had a major
effect on our revenue, but they have now indicated that they wish
to expand the estate significantly again and this will see an
additional 60 RMUs in place by the end of 2019. We had anticipated
this occurring in the third quarter of the year, but will now occur
mainly during the fourth quarter which will have some impact on
revenue in 2019. We have also signed an agreement with MFI, part of
Unibail Rodamco Westfield group, for the provision of RMUs across
their estate which we anticipate being approximately 25 RMUs in
place for November and December 2019 with a target of 35 units in
place for 2020. This is the first time we will have worked with
this portfolio and we look forward to working with them on
developing other commercialisation streams to them. The estate
includes premium malls across Germany.
As a result of these agreements, the outlook is increasingly
positive and we anticipate having 140 to 150 RMUs in operation next
year, leading to a resurgence in this division in 2020. We
currently have the required RMUs available in our warehouses so we
will not be required to invest significantly in any additional RMUs
to fulfil these contracts. The contracts are on a revenue share
basis, so we will have no significant revenue guarantee
exposure.
USA
Over the past year we have been developing our relationship with
MG Malls, the largest independent out-of-home media business in the
USA. We notified the market of the signing of an exclusive sales
agreement with MG Malls last year and since then they have been
demonstrating the unique benefits of our MPK system has to various
US Mall operators. This appears to be starting to move forward,
with discussions regarding up to 85 MPKs being considered for 2020.
We will be able to gauge their progress before the end of the
year.
India
India continues to trade in line with expectations and has
recently won new airport contracts in Chennai, Kolkata, Trivandrum
and Udaipur. They are well advanced in discussions to engage in a
franchise agreement with a client which will open the Sri Lankan
market to our products. We continue to explore options to sell this
business in 2020.
Overheads
During 2018, the Group carried out a programme of overhead
reduction, by streamlining the management structure and reducing
headcount in contracting divisions such as German promotions. This
has resulted in a GBP0.2m (9%) reduction in administration expenses
in the first half of 2019 compared with the same period in 2018.
This programme has continued during 2019 and further savings will
flow through in 2020.
Outlook
We were delighted to welcome ASDA to our service during the
second quarter. We are initially focussing on a small group of
supermarkets but hope to expand this further in 2020. This is part
of our strategy to complement our shopping centre estate with
alternative high footfall venues, ensuring we have the widest
possible portfolio to offer our retail and promotional customers .
This is an exciting new market for us and we are working closely
with the ASDA asset team to identify opportunities which deliver
new complimentary offers for their stores.
Overall 2019 will not see the return to the level of forecasted
profits we had previously anticipated although we do anticipate
profit before taxation in the region of GBP0.1m (2018: loss before
taxation and non-recurring costs of GBP0.2m). The slower than
expected contract approvals for German RMU expansion coupled with
the drag in the UK in the third quarter as budgets are held back
due to market uncertainty will lead to lower than planned revenue
in the second half of the year. Quarter four is traditionally the
most important quarter for bookings and I am happy to say that the
German RMU estate has predominantly been presold to retailers for
Christmas 2019. However, in the UK Brexit headwinds are delaying
our sales pipeline especially in the experiential market. Brand
spend appears to be being held back and we are concerned this will
not bounce back as strongly as normal before the end of the year.
We will see a positive turnaround in profitability compared to
2018, but it will not be where we had planned. However, the
foundations for a sustainable and significant turnaround have
begun. Although the resurgence of German RMUs has come too late to
have a significant impact on 2019, the new venues joining our
service this year and the pipeline of additional venues in
development for 2020 is the most positive it has been for many
years. This will result in substantial revenue improvements next
year.
Matthew Bending
27 September 2019
Independent Review Report to SpaceandPeople plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 June 2019 which comprises, the consolidated
statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of cash flows, the
consolidated statement of changes in equity and the related
explanatory notes. We have read the other information contained in
the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement. Our review has been undertaken so that we
might state to the company those matters we are required to state
to it in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules for Companies.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, Interim
Financial Reporting, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity, issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2019 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the AIM Rules for Companies.
Campbell Dallas Audit Services
Accountants
Statutory Auditors
Titanium 1
King's Inch Place
Renfrew
PA4 8WF
Date: 27 September 2019
Consolidated Group Statement of Comprehensive Income
For the 6 months ended 30 June 2019
Notes 6 months 6 months 12 months
to 30 June to 30 June to 31 December
'19 '18 '18
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Revenue 5 3,759 3,851 7,939
Cost of sales (1,410) (1,276) (2,886)
Gross profit 2,349 2,575 5,053
Administration expenses (2,481) (2,733) (5,360)
Other operating income 98 69 136
Operating loss before
non-recurring costs (34) (89) (171)
Non-recurring costs - - (244)
Operating loss (34) (89) (415)
Finance income 3 1 7
Finance costs (9) - (7)
Loss before taxation (40) (88) (415)
Taxation - - (282)
Loss after taxation
Other comprehensive
income (40) (88) (697)
Foreign exchange differences
on translation of foreign
operations 10 8 (5)
Total comprehensive income
for the period (30) (80) (702)
Loss attributable to:
Owners of the Company (27) (77) (674)
Non-controlling interests (13) (11) (23)
------- ------- --------
(40) (88) (697)
------- ------- --------
Total comprehensive
income for the period
attributable to:
Owners of the Company (17) (69) (679)
Non-controlling interests (13) (11) (23)
------- ------- --------
(30) (80) (702)
------- ------- --------
Earnings per share 13
Basic - Before non-recurring (0.14)p (0.40)p (2.2)p
costs (0.14)p (0.40)p (3.5)p
Basic - After non-recurring (0.13)p (0.35)p (2.2)p
costs (0.13)p (0.35)p (3.5)p
Diluted - Before non-recurring
costs
Diluted - After non-recurring
costs
Consolidated Group Statement of Financial Position
At 30 June 2019
Notes 30 June 30 June 31 December
'19 '18 '18
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Assets
Non-current assets:
Goodwill 6 7,981 8,225 7,981
Other intangible assets 7 1 9 4
Property, plant & equipment 8 671 1,026 849
------------- ------------- ------------
8,653 9,260 8,834
Current assets:
Trade & other receivables 3,469 3,180 3,553
Cash & cash equivalents 9 1,056 512 843
------------- ------------- ------------
4,525 3,692 4,396
Total assets 13,178 12,952 13,230
------------- ------------- ------------
Liabilities
Current liabilities:
Trade & other payables 3,429 3,095 3,677
Current tax payable
/ (receivable) 21 (111) 197
3,450 2,984 3,874
Non-current liabilities:
Deferred tax liabilities 101 91 101
Long term loan 10 500 - -
------------- ------------- ------------
601 91 101
Total liabilities 4,051 3,075 3,975
------------- ------------- ------------
Net assets 9,127 9,877 9,255
------------- ------------- ------------
Equity
Share capital 12 195 195 195
Share premium 4,868 4,868 4,868
Special reserve 233 233 233
Retained earnings 3,611 4,336 3,726
Equity attributable
to owners of the Company 8,907 9,632 9,022
------------- ------------- ------------
Non-controlling Interest 220 245 233
------------- ------------- ------------
Total equity 9,127 9,877 9,255
------------- ------------- ------------
Consolidated Group Statement of Cash Flows
For the 6 months ended 30 June 2019
Notes 6 months 6 months 12 months
to 30 June to 30 June to 31 December
'19 '18 '18
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Cash inflow / (outflow)
from operations 9 (1,660) (1,389)
Interest received 3 1 7
Interest paid (9) - (7)
Taxation (176) (65) (29)
------------- ------------- ----------------
Net cash (outflow) from
operating activities (173) (1,724) (1,418)
------------- ------------- ----------------
Cash flows from investing
activities
Purchase of intangible - - -
assets
Purchase of property,
plant & equipment 8 (16) (132) (107)
Net cash outflow from
investing activities (16) (132) (107)
------------- ------------- ----------------
Cash flows from financing
activities
Bank facility (repaid)
/ received 10 500 - -
Dividends paid 11 (98) (293) (293)
------------- ------------- ----------------
Net cash inflow / (outflow)
from financing activities 402 (293) (293)
------------- ------------- ----------------
Increase / (decrease)
in cash and cash equivalents 213 (2,149) (1,818)
Cash at beginning of period 843 2,661 2,661
------------- ------------- ----------------
Cash at end of period 9 1,056 512 843
------------- ------------- ----------------
Reconciliation of operating
profit to net cash flow
from operating activities
Operating loss (34) (89) (415)
Write off of goodwill - - 244
Amortisation of intangible
assets 3 6 11
Depreciation of property,
plant & equipment 194 253 405
Effect of foreign exchange
rate moves 10 8 (5)
(Increase) / decrease
in receivables 84 187 (186)
Decrease in payables (248) (2,025) (1,443)
------ -------- --------
Cash flow from operating
activities 9 (1,660) (1,389)
------ -------- --------
Consolidated Group Statement of Changes in Equity
For the 6 months ended 30 June 2019
Share Share Special Retained Non-controlling Total
6 months to 30 capital premium reserve earnings Interest equity
June '19 GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January '19 195 4,868 233 3,726 233 9,255
Foreign currency
translation - - - 10 - 10
Dividends - - - (98) - (98)
Loss for the period - - - (27) (13) (40)
At 30 June '19 195 4,868 233 3,611 220 9,127
----------- --------- --------- ---------- ---------------- ---------
Share Share Special Retained Non-controlling Total
6 months to 30 capital premium reserve earnings Interest equity
June '18 GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January '18 195 4,868 233 4,698 256 10,250
Foreign currency
translation - - - 8 - 8
Dividends - - - (293) - (293)
Loss for the period - - - (77) (11) (88)
At 30 June '18 195 4,868 233 4,336 245 9,877
--------- --------- --------- ---------- ---------------- ---------
Share Share Special Retained Non-controlling Total
12 months to 31 capital premium reserve earnings Interest equity
December '18 GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January '18 195 4,868 233 4,698 256 10,250
Foreign currency
translation - - - (5) - (5)
Dividends - - - (293) - (293)
Loss for the period - - - (674) (23) (697)
At 31 December
'18 195 4,868 233 3,726 233 9,255
---------- --------- --------- ---------- ---------------- ---------
Notes to the financial statements
For the 6 months ended 30 June 2018
1. General information
SpaceandPeople plc is a limited liability company incorporated
and domiciled in Scotland (registered number SC212277) which is
listed on AIM (ticker: SAL).
This condensed consolidated interim financial information has
been reviewed, but not audited, by the auditors, and their
independent review is set out earlier in this report. It does not
constitute statutory accounts as defined by Section 434 of the
Companies Act 2006. The financial information for the 12 months to
31 December 2018 has been extracted from the statutory accounts for
that period. These published accounts were reported on by the
auditors without qualification or an emphasis of matter reference,
and did not include a statement under section 498 of the Companies
Act 2006, and have been delivered to the Registrar of
Companies.
This condensed consolidated interim financial information was
approved by the board on 27 September 2019.
2. Basis of preparation
This condensed consolidated interim financial information for
the 6 months ended 30 June 2019 has been prepared in accordance
with IAS 34 'Interim financial reporting'. The condensed
consolidated interim financial information should be read in
conjunction with the financial statements of the Group for the
period ending 31 December 2018 which were prepared on a going
concern basis under the historical cost convention in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union, and those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
3. Accounting policies
The accounting policies adopted in the preparation of the
condensed consolidated interim financial information are consistent
with those applied in the financial statements of the Group for the
year ended 31 December 2018.
4. Seasonality of operations
Due to the seasonal nature of the retail business, higher
revenues and operating profits are usually expected in the second
half of the year than in the first six months, particularly for
subsidiary companies POP Retail Limited and Retail Profile Europe
GmbH.
5. Segmental reporting
The Group maintains its head office in Glasgow and an office in
Hamburg, Germany. These are reported separately. The Group operates
both Promotional Sales and Retail businesses in both the UK and
Germany. The Group has determined that these are the principal
operating segments as the performance of these segments is
monitored separately and reviewed by the board.
The following table presents revenue and profit and loss
information regarding the Group's two business segments -
Promotional Sales and Retail, split by geographic area. Other
segment represents the Groups investments in SpaceandPeople
India.
Promotions Promotions Retail Retail Head Other Group
UK Germany UK Germany Office
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months
to
30 June '19
Revenue 1,764 150 1,362 471 - 12 3,759
----------- ----------- --------- --------- --------- --------- ---------
Segment profit/(loss)
before tax 509 24 116 (246) (416) (27) (40)
----------- ----------- --------- --------- --------- --------- ---------
6 months
to
30 June '18
Revenue 1,465 199 1,447 722 - 18 3,851
----------- ----------- --------- --------- --------- --------- ---------
Segment profit/(loss)
before
Tax 156 (107) 361 (77) (394) (27) (88)
----------- ----------- --------- --------- --------- --------- ---------
12 months
to 31 December
'18
Revenue 3,238 369 3,062 1,236 - 34 7,939
----------- ----------- --------- --------- --------- --------- ---------
Segment profit/(loss)
before tax 378 (153) 494 (256) (830) (48) (415)
----------- ----------- --------- --------- --------- --------- ---------
6. Goodwill
6 months 6 months 12 months
Net book value to to to
30 June '19 30 June '18 31 December
GBP'000 GBP'000 '18
GBP'000
Opening balance 7,981 8,225 8,225
Impairment charge - - (244)
Closing balance 7,981 8,225 7,981
------------- ------------- -------------
7. Other intangible assets
6 months 6 months 12 months
Net book value to to to
30 June '19 30 June '18 31 December
GBP'000 GBP'000 '18
GBP'000
Opening balance 4 15 15
Additions - - -
Amortisation (3) (6) (11)
Closing balance 1 9 4
------------- ------------- -------------
8. Property, plant and equipment
6 months 6 months to 12 months to
Net book value to 30 June '18 31 December
30 June GBP'000 '18
'19 GBP'000
GBP'000
Opening balance 849 1,147 1,147
Additions 16 132 107
Disposals - - -
Depreciation (194) (253) (405)
Closing balance 671 1,026 849
--------- --------------------------------- ---------------------------------
9. Cash & cash equivalents
30 June '19 30 June '18 31 December
GBP'000 GBP'000 '18
GBP'000
Cash at bank and on hand 1,056 512 843
1,056 512 843
------------ ------------ ------------
10. Non-current liabilities
As at 30 June 2019, SpaceandPeople had drawn down GBP500k (June
2018: GBPnil) of its agreed long-term revolving credit facility of
GBP1 million (2018: GBP1 million) which is repayable by 31 October
2021.
11. Dividends
30 June '19 30 June '18 31 December
GBP'000 GBP'000 '18
GBP'000
Paid during the period 98 293 293
12. Called up share capital
Allotted, issued and fully 30 June '19 30 June '18 31 December
paid '18
Class Nominal
value
Ordinary 1p GBP 195,196 195,196 195,196
Number 19,519,563 19,519,563 19,519,563
13. Earnings per share
Earnings per share has been calculated using the profit / (loss)
after taxation attributable to owners of the company for the period
and the weighted average number of shares in issue.
30 June '19 30 June '18 31 December
GBP'000 GBP'000 '18
GBP'000
Loss after tax for the
period attributable to
owners of the Company (27) (77) (679)
Non-recurring items - - 244
Loss after tax for the
period before non-recurring
costs attributable to
owners of the Company (27) (77) (435)
Weighted average number
of shares in issue during '000 '000 '000
the period
* 1p ordinary shares 19,520 19,520 19,520
* Share options 1,033 2,550 2,028
* Diluted ordinary shares 20,553 22,070 21,548
SpaceandPeople plc
2(nd) Floor
100 West Regent Street
Glasgow
G2 2QD
Telephone: 0845 2418215
Email: help@spaceandpeople.com
www.spaceandpeople.com
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