TIDMLVCG
RNS Number : 1029A
Live Company Group PLC
17 January 2020
17 January 2020
LIVE COMPANY GROUP PLC
("LVCG", the "Company" or the "Group")
TRADING AND OPERATIONAL UPDATE
Live Company Group plc (AIM: LVCG) provides the following
trading and operational update for the year ended 31 December 2019
and in respect of its outlook for 2020. Whilst the Group has
demonstrated strong growth in 2019, results for year are expected
to be below market expectations.
Whilst the Group's touring and event divisions exceeded
expectations, with 71 shows and events occurring in 2019 against a
projected 60, results for 2019 have been adversely impacted as a
result of lower than expected license and content fees from China,
fewer corporate builds and lower returns from the BRICKLIVE Show at
the NEC, Birmingham. The Board of LVCG (the "Board") believes that
the lower fees from China are due to the general macro-economic
environment and slowdown in the region. Through seeking to focus on
the accelerated investment in the Group's touring portfolio and
through securing major IP partnerships, the Group is already taking
action to seek to mitigate reliance on these revenue streams going
forward. In addition, there was a delay in certain revenues that
were expected by the Board to be received before the year end and
that are now expected to be received in Q1 2020.
Based on the Group's unaudited management accounts, the Board of
LVCG expects year end 2019 financials to be broadly as follows:
-- Revenues of GBP5.5 million for 2019 (2018: GBP4.9 million
from continuing activities, of which US$1.6 million was a one off
single contract for China), representing an increase of GBP0.6
million (12%). EBITDA GBP0.7 million (2018: loss GBP0.4 million
from continuing activities) - an improvement of approximately
GBP1.1 million.
- Gross margin from continuing operations, increased to 63% from
46%, reflecting the higher revenues in 2019 from and the higher
margin of, the Group's touring shows.
-- Net Asset growth of approximately GBP4.0 million,
predominantly as a result of the funds raised for the BRICKLIVE Zoo
programme, the GBP2 million Riverfort ESA funding agreement and the
conversion of deferred liabilities into equity.
During 2019, the Group focussed resources to expand the
BRICKLIVE brand through investing in increasing the number of
touring assets and expanding the network of BRICKLIVE events in new
regions, developing multi-year relationships with global IP
partners and new BRICKLIVE partners, and developing the BRICKLIVE
Zoo Programme.
The Board believes that the investments made in 2019 will
provide the footprint for growth in future years. Whilst the Board
believes that revenue growth rates for 2020 and beyond remain in
line with previous market expectations, given the lower starting
point, in light of the lower 2019 revenues, the revised revenue
forecasts are reduced. Taking into account the revenue shortfall
for 2019, the Board is taking steps further to increase the focus
on sustainable and recurring revenues streams going forward. Whilst
the forecast gross margin in 2020 will suffer slightly, as result
of the increased deprecation charge arising from the intense 2019
asset build programme, the Board believes that the growing revenue
will deliver significant growth to the bottom line in future
years.
Highlights for 2019
-- Delivered 71 BRICKLIVE shows and events (2018: 34) held
across Europe, North America and Asia;
-- Invested in expanding our show content to meet demand and
allow us to expand into new and existing territories. As a result,
the Group now has:
- 17 touring shows (2018: 10) expanding the Group's ability to
host multiple shows and events simultaneously globally; and
- 882 models (March 2019: 650)
-- Created the BRICKLIVE Zoo division, exhibiting in multiple
zoos across Europe and North America; and
-- Appointed Licensing Management International Limited, for a
five year term, to identify partners for the licensing and
merchandising of BRICKLIVE branded merchandise and products.
Furthermore during 2019, the Group negotiated and secured
multi-year contracts with global IP partners:
-- Entered into agreements with Nickelodeon UK and Viacom
International Media Network to produce themed tours associated with
the Nickelodeon brand, including the Nick Jr. brand to cover all
countries globally (excluding the United States of America,
including Puerto Rico) up to December 2024;
-- Entered into an agreement with Snowman Enterprises Limited,
part of Penguin Random House, to produce themed tours of The
Snowman and The Snowdog in the UK, the Channel Islands, the Isle of
Man and the Republic of Ireland for an initial period up to January
2022; and
-- Negotiated a multi-year license agreement with Entertainment
One UK Limited, a wholly owned subsidiary of Entertainment One Ltd
("eOne"), to produce themed tours associated with properties and
characters of one of the world's most famous and global children's
brand, Peppa Pig that was subsequently entered into and announced
on 14 January 2020.
In 2019, the Group secured multi-year contracts with new global
partners, namely:
-- Imagine Exhibitions Inc., a company incorporated in Georgia,
USA, for BRICKLIVE touring shows in North America (being the USA
and Canada) up to August 2024;
-- AWC AG, a leading exhibition provider, to promote, manage and
operate BRICKLIVE events in Germany up to February 2023;
-- PALEXPO SA, an exhibition provider, to promote, manage and
operate BRICKLIVE shows in Palexpo, Geneva, Switzerland up to the
end of December 2021;
-- Exhibition Hub SPRL, an exhibition provider, to promote,
manage and operate BRICKLIVE shows in Belgium up to the end of
November 2021; and
-- BRICKLIVE (South Africa) Limited joint venture partnership
with WORLDSPORT (PTY) Limited, a company incorporated in South
Africa to promote BRICKLIVE events in South Africa.
Outlook for 2020
As a result of the Group's significant investment during 2019 to
expand and deliver new BRICKLIVE touring assets, the Group has
already secured GBP3.0 million of recognised revenue for 2020,
which is over 50% higher than at the same time last year.
The Group was pleased to announce on 14 January 2020, that it
had entered into a multi-year license agreement with its third IP
partner, Entertainment One UK Limited, to produce themed tours
associated with properties and characters of one of the world's
most famous and global children's brand, Peppa Pig.
In addition to the multi-year contracts already in place, the
Group has also entered into the following agreements in 2020, which
will continue the expansion of the BRICKLIVE brand into new and
existing territories:
-- BRICKLIVE, Italy. The Group has signed a five year
representation agreement with Milano Talent Factory SRL ("MTF"), a
company registered in Milan, Italy. Under the agreement, MTF will
seek to expand the Group's presence in Italy, including identify
suitable venues to stage BRICKLIVE shows in Italy.
Mr Stefano Bethlen, the owner of MTF, has spent over 16 years
working with The Walt Disney Company. His roles included Head of
Business Affairs and Operations of The Walt Disney Company in
Italy, Head of Theatrical Distribution & Marketing and more
recently, Chief Marketing Officer across Italy. Mr Bethlen was
involved in the franchise plans for major Disney brands including
the Marvel, Star Wars, Mickey, Princess, Cars, and Frozen brands in
Italy.
-- BRICKLIVE, Australia and New Zealand. The Group has signed a
three year representation agreement with The Costa Advisory PTY LTD
("TCA"), a company registered in Victoria, Australia. Under the
terms of the agreement, TCA will seek to assist the Group in
expanding its presence in Australia and New Zealand, to identify
suitable venues to stage BRICKLIVE shows and tours and, if
requested, to deliver the BRICKLIVE shows.
Mr Con Apostolopoulos of TCA has over 20 years' experience in
the entertainment industry and his roles have included President of
Partnerships for Fox International Channels before becoming Senior
Vice President of National Geographic.
-- BRICKLIVE Show, Dallas, North America. Following the success
of the BRICKLIVE Show in Dallas in January 2019, the BRICKLIVE Show
will be returning to The Star in Frisco, Dallas on 18 and 19 July
2020. This will be the Group's second BRICKLIVE Show in Texas,
North America.
-- BRICKLIVE Show, Franklin Institute, Philadelphia, North
America. The Company reports that through its US joint venture
Company, Parallel Three Six Zero Inc. ("PTSZ") has signed a license
agreement with the Franklin Institute in Philadelphia, North
America to deliver a BRICKLIVE show that will be held between 2 May
and 5 June 2020.
-- BRICKLIVE Tour and Show, Israel. Building on the agreement in
2019, the Group has signed an agreement with HADRAN 2006 D.S
Marketing and Tickets Distribution Ltd to lease the BRICKLIVE
Brickosaurs Tour between 10 July and 31 August 2020. In addition,
the Group has agreed to provide content for a BRICKLIVE show, to
held in Israel between 7 March and 20 April 2020.
As highlighted by the agreements entered into in 2019 and those
set out above, the Group, over the last 12 months, has sought to
shift its focus to the expansion of its touring business compared
to 2018 where the focus was predominantly on license and content
fees.
To facilitate this, the Group expanded its touring asset base in
2019 and, to continue this growth, the Group secured funding
through the restructuring of and increase in, the previous loan
agreement with YA II PN, Ltd. and RiverFort Global Opportunities
PCC Limited (formerly Cuart Investments PCC Limited) (together the
("Investors") as announced on 16 December 2019.
As a result of the new facility, the Group has accelerated its
build programme for 2020, with the aim to build up to 16 BRICKLIVE
themed tours by the end of 2020. The Group has the ability to draw
down a further GBP0.7 million under the new facility subject to the
Investors' approval in 2020, should this be required by the Group.
In addition, the Group continues to work with finnCap Group plc to
assess the appetite of a number of financial institutions to
provide debt financing.
Non-executive Director Fees
In support of the Group's continued focus on investing in the
development of further show content, Mr Murugason and Mr Freebairn
have agreed to be issued new ordinary shares of 1 pence each in the
capital of the Company ("Ordinary Shares") (the "Fee Shares") at a
price of 30 pence per share, being equal to the closing share price
on 16 January 2020, in respect of fees due to them as Non-executive
Directors. Mr Murugason will be issued 100,000 Fee Shares in
respect of fees due to him of GBP30,000 in respect of his
Non-executive Director duties from 1 April to 31 December 2019 and
Mr Freebairn will be issued 16,667 Fee Shares in respect of fees
due to him of GBP5,000 in respect of his Non-executive Director
duties from 1 October to 31 December 2019.
The Fee Shares will rank pari passu with the existing Ordinary
Shares and application will be made for 116,667 Shares to be
admitted to trading on AIM ("Admission"). It is expected that
Admission will become effective at 8.00 a.m. on 24 January
2020.
Following Admission, the Company's issued share capital will
consist of 79,617,086 Ordinary Shares with voting rights. There are
no Ordinary Shares held in treasury. The figure of 79,617,086 may
be used by shareholders, following Admission, as the denominator
for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest
in, the share capital of the Company under the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules.
Following the issue of the Fee Shares, Mr Murugason and Mr
Freebairn will be interested in 1,320,317 and 471,919 Ordinary
Shares respectively, representing approximately 1.66% and 0.59%
respectively of the Company's then issued share capital.
EIS Status
The Company is pleased to announce that it has now received
confirmation from HM Revenue & Customs ("HMRC") that certain of
the Ordinary Shares issued pursuant to the placing in February 2019
are eligible for EIS tax reliefs. As a result, the Company confirms
it will issue the authorised EIS3 Form to the five applicable
investors, in accordance with HMRC legislation.
Based on the receipt of the HMRC confirmation, the Company
expects that, dependent on the individual investor's tax position
going forward, any new Ordinary Shares issued by the Company
pursuant to an equity fundraise are likely also to be eligible for
EIS relief, subject to meeting HMRC requirements. However, the fact
that a previous investment in the Company meets the EIS
requirements is no guarantee that a future investment will also
qualify for EIS tax reliefs.
Shareholder event
As announced on 16 December 2019, the Company is today hosting a
shareholder event at 9.30 a.m. at Wembley Stadium, Wembley Park,
London. Shareholders and non-shareholders wishing to attend the
event should have registered their interest by email
(info@livecompanygroup.com) and will need to bring ID to attend the
event.
The presentation to be provided at the event will shortly be
available on the Company's website, along with the Group's Year
Book, which provides images from some of the Group's shows and
events held during 2019.
David Ciclitira, Chairman LVCG commented: "2019 has been a year
of growth for the business. It has been a year of significant
investment in all areas of the business, which included increasing
the number of BRICKLIVE shows and events, launching the BRICKLIVE
Zoo programme and BRICKLIVE's IP programme. There have been 71
BRICKLIVE events globally and we are now working with three
international IP partners and have access to 12 IP properties. We
recently announced our partnership with eOne, part of Hasbro Inc.,
and today we announce that we have increased our BRICKLIVE partner
base to include Italy, Australia, New Zealand and Israel. We will
continue to develop the BRICKLIVE brand and I look forward to
keeping shareholders updated going forward".
Enquiries:
Live Company Group Plc Tel: 020 7225 2000
David Ciclitira, Chairman Live Company Group
Ruth Cunningham, Chief Operating Officer
Strand Hanson Limited (Nominated Adviser) Tel: 020 7409 3494
Stuart Faulkner / Richard Tulloch
Shard Capital Partners LLP (Broker) Tel: 020 7186 9952
Damon Heath
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
LIVE COMPANY GROUP
Live Company Group plc ("LVCG", the "Company" or the "Group") is
a live events and entertainment Company, founded by David Ciclitira
in December 2017. The Company was admitted to trading on AIM in
December 2017, following the reverse acquisition of Brick Live
Group and Parallel Live Group by LVCG.
The Group is a network of partner-driven fan-based 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.
BRICKLIVE, which is fast becoming a leading children's education
and entertainment brand, actively encourages all to learn, build
and play, and provides inspirational events and shows where
like-minded fans can push the boundaries of their creativity.
Bright Bricks is the Group's production centre for building brick
based models. The Group is an independent producer of BRICKLIVE and
is not associated with the LEGO Group.
Website: www.livecompanygroup.com.
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London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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January 17, 2020 02:00 ET (07:00 GMT)
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