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Snoozebox Holdings PLC  -  ZZZ   

Interim Results

Released 07:10 01-Sep-2015

RNS Number : 5858X
Snoozebox Holdings PLC
01 September 2015
 

 


SNOOZEBOX HOLDINGS PLC

 

Interim results for the six months ended 30 June 2015

Snoozebox Holdings plc (AIM: ZZZ), ("the Company") today announces its interim results for the six months ended 30 June 2015.

Financial Highlights 

·      Revenues increase by over 300% to £2.4m, compared to £0.7m in the same period last year 

·      Growth in gross profit to £1.5m (H1 2014: £0.5m), driving the increase in contribution to overheads of £0.7m

·      EBITDA pre-exceptional loss of £1.6m in-line with last year, reflecting a higher contribution in the period offset by investment in systems, processes, resources and brand development as the business prepares for scale

·      Net assets of £17.6m, with cash at the period-end of £10.7m

 H1 Milestones

·      Market opportunity and investment case validated

·      25% increase in room stock to over 800 hotel rooms, mix of room inventory under review with current plans to roll out a further 150 new event hotel rooms for 2016 season

·      15 deployments, a fourfold increase year-on-year, with Snoozebox featuring at key music and motorsport events in UK and Europe

·      Launch of Event Village and four new innovative offerings: new event hotel room, the new 'Snoozy' pop-up room, new Snoozebox Social Hub and portable housing model

·      300 rooms deployed on a semi-permanent basis, in line with strategy; projects identified for deployment of a further 500 rooms post 2015 events season subject to relevant planning consents

·      Successful entry into new markets and sectors, including film sector and sports performance

·      Global recognition in 2015 from multiple prestigious global awards as an emerging brand, leading in innovation and design

 

Lorcán Ó Murchú, Chief Executive, commented,

"Snoozebox continues to make solid progress, growing revenues, gross profit and contribution to overhead. We have broadened our product offering and strengthened our operating model, in line with our strategy to position the business for sustainable long-term growth. 

Demand for our unique, high quality offering remains high, both from the UK and overseas.  With greater visibility, clear growth prospects and an executable event model, our focus in the second half of the year will be to build on the strong foundations we now have in place, investing in further improving and growing the core business, as well as expanding into new sectors and markets."

1 September 2015

 

 

 

Enquiries

Panmure Gordon

020 7886 2500

 

Corporate Finance:


Fred Walsh

Duncan Monteith




Corporate Broking:


Charles Leigh-Pemberton

Media

Tulchan Communications

Camilla Cunningham

 

 

 

020 7353 4200



 

 





www.snoozebox.com

 

 

CHIEF EXECUTIVE'S REPORT

In the first half of 2015 the Company grew revenue for the third successive reporting period, with gross profit and contribution to overheads both ahead of expectations. The Company continues to make progress executing its new strategy, adopted in 2014, delivering further milestones and laying the foundations for sustained growth.

 

Revenues for the first six months of the year grew by over 300% to £2.4m compared with £0.7m for the same period last year. Gross profit of £1.4m, or 61%, generated a positive contribution to overheads of £0.7m, compared to a 
contribution of £0.1m, in the same period last year.

 

The higher contribution in the period has been offset by increased overheads, reflecting investment in systems, 
processes, resources and brand development as the business prepares for scale. The resulting EBITDA loss
is similar to last year. Exceptional items of £0.1m related primarily to the completion of a reorganisation 
that commenced at the end of last year. Cash at the period end was £10.7m and the Company had net assets of £17.6m.

 

Room stock increased 25% in the first half of 2015. At present the Company has just over 800 rooms under 
management compared to 578 in the same period last year. The increase was composed of 210 
new 'Snoozy' pop-up rooms, in addition to the first new Snoozebox event hotel rooms. 
The Company is reviewing its mix of room inventory, and is currently intending to build a further 150 new 
Snoozebox event hotel rooms for the 2016 season, which would take the total room inventory to over 950 rooms.

 

Occupancy rates have exceeded 90% at most events, with a number sold out. The ARR in the period for 
the Snoozebox hotel rooms was £156, compared with £147 in FY2014. The ARR for the new non-ensuite 
Snoozy rooms was £76 in its first two months of operation, giving an overall blended ARR of £140.

 

Progress against strategic objectives

In 2014 the Company set out a new strategy to position the business for long term growth. This has focused on three key objectives:

 

-    Re-deployment of the original 578 Snoozebox hotel rooms on a long term or semi-permanent basis

 

-    Identification of other sectors to apply the portable Snoozebox model on a semi-permanent basis

 

-    Design and development of a new event model capable of generating financial returns

 

Semi-Permanent

While the original Snoozebox hotel model created the market and proved both demand and pricing, returns from short term events were offset by high deployment costs. The strategy to re-deploy this room stock has focused on finding longer term or semi-permanent opportunities. Just under 300 of the original rooms are currently 
deployed on a long term basis, the remainder being retained for the 2015 events season to satisfy demand in 
the events schedule.

 

The Company has hotels deployed at Silverstone Race Track and at the Eden Project. In H1 2015 Snoozebox successfully opened an 80 bedroom fully serviced workforce hotel for Premier Oil to support its overseas 
exploration activities. The pipeline of semi-permanent opportunities is strong and the Company is progressing with 
projects where a further 500 hotel rooms could be deployed on a long term basis, subject to receiving the relevant planning consents.

 

Although the original Snoozebox room stock was not designed to service the semi-permanent market, 
based on deployments to date, there is an increasing level of confidence that, when fully deployed, this 
room stock is capable of generating a contribution that would cover the core central overhead.

 

The Company is in the process of developing a portable hotel model that is specifically designed for the semi- permanent market.

 

New sectors for semi-permanent model

The Company created and exhibited a new portable housing model in H1 which has attracted interest from local 
authorities and the wider market. It has recently been selected by Ealing Council to provide a temporary social housing solution, in partnership with the Mears Group plc, to deliver modular serviced accommodation of c.70 units to meet a requirement for interim and immediate social housing. This project has entered the pre-construction phase, 
during which the scheme design will be finalised and the planning process commenced. Snoozebox has also 
designed a portable medical hotel model, in partnership with Compass plc, and is now looking to pilot this model.

 

New event models

The Company has introduced a flexible operating model and designed new portable hotel rooms capable 
of being deployed at a lower cost than the original Snoozebox model. In H1 2015, the Company has deployed two new hotel room designs at events: 'Snoozy', a pop-up non-ensuite room, and the new Snoozebox event hotel room. 
These deployments have enabled the Company to validate the market opportunity and investment case and grow the event footprint. The Company's experience to date in developing the core UK circuit is that it takes around three 
years to optimise an event deployment. The new room designs have enabled the Company to adopt a strategy of 
'trailblazing' in the first year of an event, i.e. using a small number of rooms to showcase, engage with event organisers and appraise the opportunity.  The size of the deployment can then be increased with the service offering established and integrated into the event. The third year allows the offering to be refined and the deployment, 
guest experience and financial return optimised.

 

There are now three different sleeping accommodation models and a new portable social hub being deployed, compared to one room-type last year. The business has made improvements in service delivery, however the broadening of the event offering, combined with an ambitious scaling of the event footprint has highlighted some aspects of the operating model that require refinement to enable consistent execution of guest experience.

 

The second half of the year will see further investment in operations and service delivery.

 

The Snoozebox Event Village was successfully launched at the Isle of Man TT races and has since been deployed for 
the first time in the film sector and at other events including Glastonbury and the British Grand Prix. The village 
includes social areas and multiple tiers of sleeping accommodation.

 

The Company has experienced a considerable increase in engagement and interest in the Snoozebox brand. It is at an early 
stage in the implementation of a digital media strategy and H1 has already seen substantial growth in its online 
community and an increasing share of our bookings coming via social media channels. The first six months has also seen 
the Company recognised by
multiple prestigious global awards as an emerging brand and leading in innovation 
and design in the sector.

 

Outlook

The growth prospects remain exciting and the Board considers that the development and execution of the Company's strategy will result in a successful and profitable business. 
The H1 results demonstrate that Snoozebox continues to make solid progress. We have transformed the event offering and strengthened our operating model, in line with our strategy to position the business for sustainable long-term growth.

 

Semi-Permanent

The Company is currently engaged in planning and contractual negotiations for further workforce accommodation  deployments and its first social housing deployment. These projects require investment in tendering, 
planning and deployment costs in advance of revenue which may be reflected in the Company's costs in the second half.

 

Events

The first six months have demonstrated the considerable opportunity in events with an expansion of the event footprint in UK, an entry into Europe and growing interest in its event offering from major international events including Olympic Games, World Cups and other sporting events. The Company 
anticipates incurring bid and tendering costs in the second half of the year associated with the current 
international events pipeline.  The second half of the year will also see further expansion of the event footprint.

 

Events in the second half include new events such as Rugby World Cup, Italian F1 Grand Prix, Hockenheim and Oktoberfest.

 

Unfortunately the Company's site at the Edinburgh Festivals was relocated after the discovery of unsafe material at the original site, prior to deployment. The hotel was deployed at the new site however occupancy and event costs were adversely affected by the relocation.

 

Looking ahead, the new 'trailblazing' strategy and broader event offering are providing greater visibility and will allow the Company to complete over 30 deployments this year compared to 11 last year.

 

Summary

With greater visibility, clear growth prospects and an executable event model, the focus in the second half of the year 
is to establish a robust platform on which to build the brand and scale the business. 
As a consequence, there will be further expenditure in operations, service delivery and on the blueprint for execution of the brand experience. In the short term, while revenues continue to grow strongly, the Company does not expect to be EBITDA positive in the second half of the year.

 

 

L Ó MURCHÚ

1 September 2015


 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 
Note
Unaudited
six months
to 30 June
2015
£'000
Unaudited
six months
to 30 June
2014
£'000
Audited
twelve months
to 31 December
2014
£'000
 
 
 
 
 
REVENUE
 
2,357
731
2,755
Cost of sales
 
(908)
(229)
(953)
GROSS PROFIT
 
1,449
502
1,802
Logistics, deployment and equipmenthire
 
(795)
(406)
(1,346)
CONTRIBUTIONTOCENTRALOVERH EADS
 
654
96
456
Administrativeexpenses
 
(2,219)
(1,515)
(4,212)
Marketingexpenses
 
(229)
(149)
(253)
Depreciation
5
(814)
(691)
(1,396)
 
 
 
 
 
EBITDA (pre exceptionalitems)
 
(1,632)
(1,568)
(3,585)
Exceptionalitems
3
(162)
-
(424)
Depreciation
5
(814)
(691)
(1,396)
LOSS FROM OPERATINGACTIVITIES
 
(2,608)
(2,259)
(5,405)
Finance income
 
17
17
42
Financeexpenses
 
(464)
(42)
(273)
LOSSBEFORE TAXATION
 
(3,055)
(2,284)
(5,636)
Taxation
 
-
-
-
LOSS AND TOTAL COMPREHENSIVE INCOMEFOR
THEYEARATTRIBUTABLETO EQUITY SHAREHOLDERS
 
 
(3,055)
 
(2,284)
 
(5,636)

 

 

CONSOLIDATED BALANCE SHEET

 

 

 

 
Note
Unaudited
six months
to 30 June
2015
£'000
Unaudited
six months
to 30 June
2014
£'000
Audited
twelve months
to 31 December
2014
£'000
 
 
ASSETS
NON-CURRENTASSETS
Property, plant andequipment                                                                          
 
 
5
 
 
 
17,362
 
 
 
14,523
 
 
 
15,671
TOTAL NON-CURRENTASSETS
 
17,362
14,523
15,671
CURRENTASSETS
 
 
 
 
Inventories
 
44
28
26
Trade and otherreceivables
 
2,061
869
1,376
Cash and cashequivalents
 
10,674
11,739
16,913
TOTAL CURRENTASSETS
 
12,779
12,636
18,315
TOTALASSETS
 
30,141
27,159
33,986
 
LIABILITIES
CURRENTLIABILITIES
 
 
 
 
Trade and otherpayables
 
2,798
2,456
3,551
Loans andborrowings
 
1,137
340
539
TOTAL CURRENTLIABILITIES
 
3,935
2,796
4,090
NON-CURRENTLIABILITIES
Loans andborrowings
 
 
 
 
8,598
 
 
345
 
 
9,203
TOTAL NON-CURRENTLIABILITIES
 
8,598
345
9,203
TOTALLIABILITIES
 
12,533
3,141
13,293
TOTAL NETASSETS
 
17,608
24,018
20,693
 
EQUITY
 
 
 
 
Share capital
 
2,119
2,119
2,119
Share premium
 
37,009
37,009
37,009
Other reserves
 
718
718
718
Retained earnings
 
(22,238)
(15,828)
(19,153)
TOTAL EQUITY
 
17,608
24,018
20,693

 


 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

Called up

share capital

£'000

 

Share premium

£'000

 

Other reserves

£'000

 

Retained earnings

£'000

 

Total equity

£'000

AT 31 DECEMBER 2014

2,119

37,009

718

(19,153)

20,693

Loss and total comprehensive income for financial period

-

-

-

(3,055)

(3,055)

Equity-settled share-based payment

-

-

-

(30)

(30)

AT 30 JUNE 2015 (UNAUDITED)

2,119

37,009

718

(22,238)

17,608

 

 

AT 31 DECEMBER 2013

 

 

1,089

 

 

29,920

 

 

718

 

 

(15,050)

 

 

16,677

Loss and total comprehensive income for financial period


-

-

(2,284)

(2,284)

 Equity-settled share-based payment

-

-

-

(20)

(20)

Issue of new equity shares

1,030

7,740

-

1,530

10,300

Share issue costs

-

(655)

-

-

(655)

AT 30 JUNE 2014 (UNAUDITED)

2,119

37,005

718

(15,824)

24,018

 

 

AT 31 DECEMBER 2013

 

 

1,089

 

 

29,920

 

 

718

 

 

(15,050)

 

 

16,677

Loss and total comprehensive income for financial period

-

-

-

(5,636)

(5,636)

Equity-settled share-based payment

-

-

-

3

3

Issue of new equity shares

1,030

7,740

-

1,530

10,300

Share issue costs

-

(651)

-

-

(651)

AT 31 DECEMBER 2014

2,119

37,009

718

(19,153)

20,693

 



 

CONSOLIDATED CASH FLOW STATEMENT


 
Unaudited
six months
to 30 June
2015
£'000
Unaudited
six months
to 30 June
2014
£'000
Audited
twelve months
to 31 December
2014
£'000
 
 
 
 
CASH FLOWS FROM OPERATINGACTIVITIES
 
(3,055)
 
(2,284)
 
(5,636)
Loss for theperiod
Adjustmentsfor:
 
 
 
Depreciation
814
691
1,396
Equity-settled share-based paymentexpense
(30)
(20)
3
Net finance(income)/expenses
447
25
231
CASH FLOWS FROM OPERATING ACTIVITIESBEFORE
 
(1,824)
 
(1,588)
 
(4,006)
CHANGES IN WORKING CAPITAL ANDPROVISIONS
(Increase)/decrease ininventories
(18)
(19)
(17)
(Increase)/decrease in trade and otherreceivables
(685)
(499)
(946)
Increase/(decrease) in trade and otherpayables
(753)
746
1,622
CASH GENERATED BY/(USED IN)OPERATIONS
(3,280)
(1,360)
(3,347)
INVESTINGACTIVITIES
 
 
17
 
 
17
 
 
42
Interestreceived
Payments to acquire property, plant andequipment
(2,505)
(988)
(2,853)
Proceeds from the sale of property, plant andequipment
-
-
-
NET CASH INFLOW/(OUTFLOW) FROM INVESTINGACTIVITIES
(2,488)
(971)
(2,811)
FINANCINGACTIVITIES
 
 
-
 
 
-
 
 
9,553
Drawdown on lease finance facility net of arrangementcosts
Issue of equity shares net of issuecosts
-
9,645
9,649
Interest paid
(421)
-
(102)
Repayment to finance leasecreditors
(50)
(245)
(699)
NET CASH INFLOW FROM FINANCINGACTIVITIES
(471)
9,400
18,401
NETINCREASE/(DECREASE)INCASHANDCASHEQUIVALENTS
(6,239)
7,069
12,243
Opening cash and cashequivalents
16,913
4,670
4,670
CASH AND CASH EQUIVALENTS AT 30 JUNE2014
10,674
11,739
16,913



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.   GENERAL INFORMATION

 

Snoozebox Holdings plc (the 'Company') was incorporated in England and Wales on 30 March 2012 under the Companies Act 2006 (registration number 8013887) and its registered address is 60 Trafalgar Square, London WC2N 5DS.
On 1 May 2012, the Company was admitted to the alternative investment market of the London Stock Exchange (AIM) where its
ordinary shares are traded. Copies of this Interim Report may be obtained from the registered address or on the investor relations
section of the Company's website at 
www.snoozebox.com.

 

2.    ACCOUNTING POLICIES

 

a) Statement of compliance and basis of preparation.

The financial information presented in this Interim Report has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union. The principal accounting policies adopted in the preparation of the financial information in this Interim Report are unchanged from those used in the company's financial statements for the year ended 31 December 2014 and are consistent with those that the company expects to apply in its financial statements for the year ended 31 December 2015.

 

The financial information for the year ended 31 December 2014 presented in this Interim Report does not constitute the company's statutory accounts for that period but has been derived from them. The Annual Report and Accounts for the year ended 31 December 2014 were audited and have been filed with the Registrar of Companies.

 

The Independent Auditors' Report on the Annual Report and Accounts for the year ended 31 December 2014 was unqualified and did not draw attention to any matters by way of emphasis and did not contain statements under s498(2) or (3) of the Companies Act 2006. The financial information for the six month periods ended 30 June 2015 and 2014 are unaudited and have not been reviewed by the company's auditors.

 

The condensed financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

 

(b)  Going concern

The condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as they fall due for the foreseeable future. The Group is dependent for its working capital requirements on cash generated from operations and cash holdings.

 

The cash holdings of the Group at 30 June 2015 were £10,674,000.

 

The Directors have prepared cash flow projections which are based on certain assumptions. These show that the Group is capable
of operating within the financing arrangements referred to above and of meeting its liabilities as they fall due for a period of not less
than 12 months from the date of these condensed financial statements.

 

The Directors have therefore continued to adopt the going concern basis in preparing these financial statements. The financial statements do not include any adjustments that would result if the going concern basis was not appropriate.

 

(c)  Presentation of Accounts

The following amendments have been made to the consolidated balance sheet and the consolidated statement of changes in equity for the period ended 30 June 2014, to reflect the treatment adopted in the financial statement of the Company for the year ended 31 December 2014:

 

The Share premium arising on the issue of new equity shares in the period has been reduced by £1,530,000 and retained earnings increased by the same amount to reflect the fair value of the warrants issued at the same time.

 

A new category of costs, "Marketing" has been added to the disclosures in arriving at the Loss from Operating Activities to provide a greater clarity of the operational areas in which the costs have been incurred.

 

 
Restated
2014
£’000
Original
2014
£’000
CONTRIBUTION TO OVERHEADS
96
96
Administrative expenses
(1,515)
(1,664)
Marketing expenses
(149)
-
Depreciation
(691)
(691)
LOSS FROM OPERATING ACTIVITIES
(2,259)
(2,259)

 

3.    EXCEPTIONAL ITEMS

 

Increase in provision for settlement

The Group has a dispute with the solicitors who represented a claimant against the group and has provided

£75,000 in relation to the claim.

 

Reorganisation costs

During 2015, as a part of a continued strategy to reduce fixed costs, the group further reduced permanent headcount.  The cost amounted to £87,000 (2014: £149,000)

 

New product costs

The Group incurred costs associated with new rooms that were not of a capital nature, these included test deployments, the development of new marketing and sales collateral and other costs associated with the launch programme.


 

Unaudited

six months

to 30 June

2015

£'000

Unaudited

six months

to 30 June

2014

£'000

Audited

twelve months

to 31 December 

2014

£'000

 

New product costs

-

-

275

Increase in provision for legal settlement

75

-

-

Reorganisation costs

87

-

149

 

162

-

424

 

 

4.   LOSS PER SHARE

 

Unaudited

six months

to 30 June

2015

Pence

Unaudited

six months

to 30 June

2014

Pence

Audited

twelve months

to 31 December 

2014

Pence

 

 

£'000                     £'000                          £'000

 

Loss for the financial period

(3,085)

(2,284)                        (5,636)

 

Number                    Number                        Number

 

Weighted average number of ordinary shares in issue

211,840,727

152,089,346                182,210,590

 

 


 

5.    PROPERTY, PLANT AND EQUIPMENT


 

 

 

 

Hotel

rooms

£'000

Hotel furniture & equipment

£'000

 

IT

Equipment

£'000

 

Motor vehicles

£'000

Total

30 June

2015

£'000

Total

30 June

2015

£'000

 


Cost

 

 

 

 

 

 

22,346

 

 

19,521

AT 31 DECEMBER 2014

20,312

1,156

203

245

Additions

1,994

494

9

8

2,505

988

AT 30 JUNE 2015

22,306

2,080

212

253

24,851

20,509

Accumulated depreciation

 

 

 

 

 

 

6,675

 

 

5,295

AT 31 DECEMBER 2014

5,698

781

90

106

Depreciation charge for the period

630

128

25

31

814

691

AT 30 JUNE 2015

6,328

909

115

137

7,489

5,986

Net book value

AT 30 JUNE 2015

 

 

15,978

 

 

1,171

 

 

97

 

 

116

 

 

17,362

 

 

14,523

AT 31 DECEMBER 2014

14,614

805

113

139

15,671

14,226


 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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