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Snoozebox Holdings PLC  -  ZZZ   

Preliminary Results

Released 14:15 29-Jun-2017

RNS Number : 6182J
Snoozebox Holdings PLC
29 June 2017
 

29 June 2017

Snoozebox Holdings plc

Preliminary announcement of results for the year ended 31 December 2016

Snoozebox Holdings plc (AIM: ZZZ), ("the Company" or "the Group") today announces its preliminary results for the year ended 31 December 2016.

2016 Highlights

·     Revenue decreased as anticipated to £2.4m (2015: £5.8m)

·     Adjusted EBITDA* loss £2.0m significantly improved (2015: £6.0m)

·     Exceptional tangible fixed assets impairment charge of £4.1m (2015: £9.6m)

·     Loss from operating activities £7.3m (2015: £17.9m loss)

·     Loss before taxation £8.9m (2015: £18.9m loss)

·     Loss per share decreased to 3.03p (2015: loss 8.91p)

·     Cash £2.4m (2015: £3.6m, of which £1.3m restricted (per note 9))

·     Net debt £5.5m (2015: net debt £5.4m)

·     Immediately prior to release of these results, capital and interest payments holiday agreed on debt for period July 17 through to April 18 inclusive

*Adjusted EBITDA is EBITDA before exceptional items and share-based payment charges

The Board is currently continuing its discussions with its primary lender concerning amendments to the Group's capital structure and funding.

Chris Errington, Executive Chairman, commented:

"Following a comprehensive strategic business review in early 2016 we have now executed the first stage of our strategy and successfully stabilised the Group's operations.  Alongside, and critical to, this we have also improved our short-term financial stability through the support of our lender by way of a debt capital and interest payments holiday.

Coming into 2017, our plans were to engage in a limited number of Events deployments, which we have done, and also to progress Semi-Permanent V1 room opportunities for first deployment in the last quarter of 2017, a plan that remains on track.

Over the past few months we have made good commercial progress with Semi-Permanent sales opportunities that were first qualified in the second half of 2016.  During 2017 we have also made good progress in qualifying a number of new deployment opportunities both in the Events and Semi-Permanent markets.  The first of these newly identified and qualified opportunities in the Events market has already been secured in June 2017 for July 2017 deployment.  Our key focus is to repeat this success by closing out further qualified sales opportunities in the second half of 2017 and on into 2018."

 

The Company's audited Annual Financial Statement for the year ended 31 December 2016 will be available on the Company's website shortly and be posted to shareholders before the end of June along with notice of the Company's Annual General Meeting.  An update will be provided in due course.

Enquiries:

Panmure Gordon

020 7886 2500

Corporate Finance:

Andrew Godber

 

Duncan Monteith

Corporate Broking:

Charles Leigh-Pemberton

 

 

STRATEGIC REPORT

The Directors present their Strategic Report for the year ended 31 December 2016.  The Strategic Report comprises the:

·     Chairman's Statement; and

·     Operating and Financial Review.

Chairman's Statement

Over the past few years, Snoozebox has established itself as a leading provider of rapidly deployed quality accommodation.  In early 2016, the Board commenced a restructuring of the Group's operations intended to improve operating stability, financial performance and position. 

We have made good progress in reducing the Group's cost burden and stabilising operations, as further set out in the Operating and Financial Review.  We have also made good progress in identifying deployment opportunities for our V1 accommodation as set out in Current Trading and Outlook section below.

Business Strategy and Position of the Business

·     Accommodation Assets.  The Group has a good stock of differentiated and viable accommodation assets and access to a reasonable market for those assets.  The Group is focussing on placing existing accommodation assets into the market with an aim of generating sufficient revenues to at least cover overheads and contribute towards servicing debt in the medium-to-long term.  The Group's room stock assets for hire comprise:

Possession of and access to 570 V1 containerised rooms (V1 rooms), all of which are owned by a third-party provider of asset finance and leased by the Group as described further at note 20 to the financial statements.  Each V1 room is ensuite and can sleep at least two adults; and

Ownership of 200 Snoozy pop-up rooms, each of which can sleep at least two adults.

·     Unique Selling Points.  The Group's key differentiator is the ability to rapidly deploy its quality accommodation solutions on a temporary or semi-permanent basis;

·     Semi-Permanent Market.  The Semi-Permanent market involves the deployment of V1 rooms for target periods of six months to many years, which the Board considers is most likely to generate the revenue and margins required to achieve the Group's short-to-medium term business objectives.  Semi-Permanent deployment also delivers longer term predictable revenues, without the drag of void periods, allowing the high one-off deployment and extraction costs to be absorbed from revenues generated over a longer period.  The Group is focussed on Semi-Permanent sales and the execution and timing of new sales to generate revenues in this market will be a critical factor in the achievement of the Group's business objectives;

·     Events Market.  The Events market involves the deployment of Snoozy rooms, complemented where there is capacity and demand by V1 rooms, for target periods of days to weeks and generates a modest contribution towards Group objectives.  The Events market has longer void periods associated with moving assets from event to event. The related high one-off deployment and extraction costs, means that this market is unlikely to contribute significantly to short or medium-term trading at the Group's current scale.  The Group will continue with the Events market where commercially viable, making appropriate use of the Group's accommodation assets and aiming for longer-term deployment periods;

·     Sales Focus.  A careful balance of Semi-Permanent and Events deployments is being sought, with a keen focus on ensuring that the Group's key objectives are met in the short-to-medium term;

·     Margins, Costs and Capex.  The Group's margins, central overheads and capital expenditure have historically been out of balance with trading and cash generation from operations. The Board is focussed on achieving an appropriate mix of costs, capital and margins to achieve medium to long term objectives.  The Board has significantly reduced central overheads during the course of 2016 and entered 2017 with central overhead cash costs now running at approximately £0.1m per month as planned.  Capital expenditure is being limited in the short-term to appropriate maintenance and replacement expenditure that keeps the existing accommodation stock in good condition.  In the medium-to-long term, and where appropriate, we will seek to match expenditure to firm new contracts for deployment; and

·     Funding and debt.  The Group has a historical capital structure that involves a significant level of debt that is inconsistent with its current and near term financial performance and position.  The Board is currently continuing its discussions with its primary lender options concerning amendments to the Group's capital structure and funding.

Business Objectives

The Group is focused on three key business objectives:

1.    In the short-term, establishing a more stable operating environment for the Group and seeking improved financial stability through renegotiating its debt;

2.    In the short-to-medium term, achieving net operating cash flows sufficient to cover central overheads and service the Group's debt; and

3.    In the medium-to-long term, securing further growth in revenues and operating cash flows from a stable base. 

In terms of short-term objectives, significant improvements have been made to the operating environment of the Group in 2016 and through into 2017.  Central overheads have also been reduced to the targeted £0.1m per month going into 2017, compared to approximately £0.4m per month entering 2016.  In November 2016, we announced an amendment to the Group's debt servicing obligations which reduced the short-term debt repayment burden whilst also reducing the overall balance outstanding through use of the Group's cash then held in escrow.  Constructive discussions with our lender are ongoing, as evidenced by the further amendment to the Group's debt servicing obligations secured immediately prior to the date of this report.

In the short-to-medium term, the Group is engaged in sales activities aimed at securing Semi-Permanent deployments of V1 rooms.  Several good opportunities for deployment of V1 rooms have been qualified and we are now at various stages of negotiation with landlords and customers for deployment.  Securing one or more of these opportunities for 80 V1 rooms alongside existing revenues would provide a good contribution towards achieving cash flow break even at an operational level (pre-debt servicing and capital expenditure) and, with time for the deployments to mature and to secure further wins, help the Group become cash generative in the medium term.

In the medium-to-long term, the Board believes that the Group has several growth options available to it, including repetition of a revised and working business strategy with similar assets, production of new assets backed by a more predictable revenue pipeline, entry into new markets or a combination of these.  Until the Group has made appropriate progress towards its objectives of stability and achieving operating cash flow breakeven, the Board will approach any such medium to long term growth plans cautiously.

Business Model

The Group earns revenue from the provision of rapidly deployed quality accommodation to customers in three main ways:

1.    Hire of accommodation stock to a customer for them to operate as a service for their end customers (a "dry hire").  The customer is responsible for operating the rooms and for room occupancy through its own sales efforts.  The Group typically secures a fixed element of committed revenue for the deployment period and may secure an additional variable element depending on commercial factors;

2.    Hire of accommodation stock to a customer where the Group is responsible for operating the accommodation as a service to end customers (a "managed service").  The Group is responsible for operating the accommodation and the responsibility for room occupancy falls into two models: 

The Group is responsible for room occupancy through its own sales efforts; or

The customer is responsible for room occupancy through its own sales efforts;

The revenue stream for both models is generally variable depending on occupancy and room rates achieved and may include a fixed element in the latter customer model; and

3.    Lease or license of land by the Group on which to deploy and then operate the Group's accommodation assets as a service to end customers (a "hotel" style deployment).  The Group is responsible for all aspects of operating the hotel, although it may sub-contract some or all obligations to third parties.

The Group can earn further revenues from each deployment through provision of additional services, such as food and drink, and these additional services, when managed well, can be a valuable source of additional margin in the right environment.

The Group's preferred model is for longer term hire or deployment of the Group's room stock, targeting hire or deployment periods of three years or more. 

Formal planning permission may be required for longer-term deployments, depending on the circumstances, and where granted may have specific covenants or conditions attached.  Planning applications introduce delay into the sales cycle.  New deployments involve a significant cash outflow covering transportation, site preparation and installation together with any ancillary capital expenditure required to complement a new deployment.  The level of such set-up expenditure can be material.

Funding and going concern

Funding

The Group initiated discussions with its primary lender in April 2016 seeking an amendment to its debt servicing obligations.  In November 2016, the Group announced amendments to its debt servicing obligations, the details of which are set out in note 20.   As reported in note 2 to the financial statements, the Group remains in constructive discussions with its primary lender, concerning repayment obligations and longer-term capital structure, and they remain supportive of the Directors' strategy and plans.  Throughout 2016 the Group paid all of its debt repayment obligations as they fell due and has continued to do so to the date of this report, taking into account the changes introduced by the November 2016 amendment.

Immediately prior to the date of this report, the Board agreed a debt capital and interest repayment holiday with its lender in respect of the four quarterly payments due in July 17 to April 18 inclusive as set out in note 2.

The Board will provide further updates on these discussions in due course.

Going concern

After making enquiries and taking account of the Group's cash resources, future trading prospects, an agreement with the primary lender for a four quarter debt capital and interest repayment holiday and ongoing supportive discussions with the primary lender regarding capital structure, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the next 12 months and, for this reason, they continue to adopt the going concern basis in preparing the financial statements.  Note 2 to the financial statements provides further information concerning the assumptions made by the directors in forming their view and should be read in conjunction with this statement.

Board Changes

The Board's composition changed significantly in 2016 since my initial appointment as a Non-Executive Director in January 2016.  In February 2016, the then Chairman and a Non-Executive director resigned, at which time I became Non-Executive Chairman, followed in April 2016 by the resignation of the CEO, at which time I became Executive Chairman.  The Board now comprises myself and two other Non-Executives. 

Current Trading

Trading in the new financial year to 30 April 2017 has been in line with the Board's expectations with an unaudited unadjusted EBITDA loss of approximately £0.4m (unaudited 4 months to 30 April 2016: £0.5m loss).  In general, and as a result of the operational changes implemented in 2016, we are seeing an early trend of increased underlying contribution to central overheads from deployments both in the Semi-Permanent and Events divisions.

Semi-Permanent

We are in the final stages of agreeing a renewal of the Group's Semi-Permanent deployment in Cornwall and anticipate remaining on site for a number of years to come.  We remain deployed and operational in Cornwall in the meantime.

We have identified and qualified several opportunities in the UK for deployment of our Semi-Permanent V1 accommodation.  A number of these are now entering final commercial negotiations which, if successfully concluded, should see deployments commencing in the fourth quarter of 2017 (consistent with our plans) and on into 2018.  The Board has assumed that any such opportunities will not generate material new revenues (or contribution to central overheads) until at least 2018.

Events

In June 2017, we will have completed two deployments of accommodation to the UK Events market, generating revenues of approximately £0.7m and an underlying anticipated contribution to central overheads of approximately £0.1m.  Guest feedback so far has been excellent for which my thanks go to our loyal and hard-working operations team.  We continue to assess Event attendance on its commercial merits and the Board expects to remain involved in this market going forward

I am pleased to report that in June 2017 we entered into a contract for the July 2017 deployment of a number of our Snoozy rooms to a new customer in the sports and leisure industry, where we expect to generate a small but valuable contribution.  We are actively looking to repeat this type of contract for provision of Snoozies going forward.

 

Central overheads are now running at approximately £0.1m per month, capital expenditure has been minimised and the Group continues to incur appropriate maintenance and replacement expenditure to keep the existing accommodation in good condition.

The Group's unaudited net debt at 30 April 2017 was approximately £6.6m, comprising £8.5m debt and £1.9m of cash and cash equivalents (31 December 2016: £5.5m net debt).

Outlook

Following a comprehensive strategic business review in early 2016 we have now executed the first stage of our strategy and successfully stabilised the Group's operations.  Alongside, and critical to, this we have also improved our short-term financial stability through the support of our lender by way of a debt capital and interest payments holiday.  The Group remains in constructive discussions with its primary lender, concerning repayment obligations and longer-term capital structure, and they remain supportive of the Directors' strategy and plans.

From this platform of relative stability, we are now much better placed to execute the second phase of our strategy - that of securing longer-term deployment opportunities for our accommodation to earn target revenues and margins that will over time cover central overheads

Coming into 2017, our plans were to engage in a limited number of Events deployments, which we have done, and also to progress Semi-Permanent V1 room opportunities for first deployment in the last quarter of 2017, a plan that remains on track.

Over the past few months we have made good commercial progress with Semi-Permanent sales opportunities that were first qualified in the second half of 2016.  During 2017 we have also made good progress in qualifying a number of new deployment opportunities both in the Events and Semi-Permanent markets.  The first of these newly identified and qualified opportunities in the Events market has already been secured in June 2017 for July 2017 deployment.  Our key focus is to repeat this success by closing out further qualified sales opportunities in the second half of 2017 and on into 2018.

I look forward to reporting progress towards securing new deployments in 2017 and beyond.

 

Chris Errington
Executive Chairman
29 June 2017


Operating and Financial Review

Operating performance table

The following tables summarise the Group's operating performance:

Revenue-based performance

2016

2015

Variance


£m

£m

£m

%

Semi-Permanent

1.4

4.0

(2.6)

-65%

Events

1.0

1.8

(0.8)

-44%

Total revenue

2.4

5.8

(3.4)

-59%

Gross profit

2.0

3.3

(1.3)

-39%

Logistics, deployment and equipment hire

(1.3)

(3.6)

(2.3)

-64%

Contribution to central overheads

0.7

(0.3)

1.0


 

Earnings-based performance

2016

2015

Variance


£m

£m

£m

%

Statutory loss before tax as reported

(8.9)

(18.9)

10.0

-53%

Adjustment for exceptional items (note 7 to financial statements)

4.4

9.9

(5.5)

-56%

Adjusted loss before tax

(4.5)

(9.0)

4.5

-50%

Net interest payable

1.6

1.0

0.6

60%

Depreciation

1.0

1.9

(0.9)

-47%

Share-based payments charge

(0.1)

0.1

(0.2)

-200%

Adjusted EBITDA

(2.0)

(6.0)

4.0

-67%






Loss after tax as reported

(8.9)

(18.9)

10.0

-53%

Basic and diluted earnings per share (pence)

(3.03)

(8.91)

5.9

-66%

 

Total revenue decreased as anticipated to £2.4m (2015: £5.8m) as the Falklands Semi-Permanent deployment came to an end and we focussed on a lower number of Event deployments.  During the year, the Group continued to provide its 58 V1 rooms at an attraction in Cornwall, which operates on a dry hire basis operated by a third party.

Contribution to central overheads improved significantly as we began controlling costs better and avoiding uncommercial deployments, whilst also benefitting from the tail end of the Semi-Permanent Falklands deployment and ongoing deployment in Cornwall.  Total contribution to central overheads improved by £1.0m, with £0.7m profit in the year (2015: £0.3m loss). 

The Semi-Permanent division returned a contribution to central overheads of £0.8m for the year (2015: £1.2m contribution) which reflects the ongoing profitable nature of such deployments, impacted by the end of our deployment in the Falklands in the first half 2016. 

The Events division returned a contribution to central overheads of £0.1m loss (2015: £1.4m loss), which whilst an improved performance suffered from an excessive direct cost base and the turmoil of a group restructuring undertaken at peak deployment time.

We commenced a reduction in the central overhead cost base in the first half of 2016 which reduced costs going into the second half of 2016 but for which the full benefit will only be seen in 2017.  As a measure of underlying trading, adjusted EBITDA improved £4.0m to a loss of £2.0m in the year (2015: £6.0m loss).  Cost reductions were made in all areas of the business, including: reducing headcount through a structured redundancy programme, reducing Board numbers and costs and removing or re-negotiating non-essential expenditure in all areas.

The Group's depreciation charge reduced in line with lower capital expenditure and the impairment charge in 2015 to a charge of £1.0m (2015: £2.0m).

Exceptional costs totalled £4.4m for the year (2015: £9.9m exceptional costs), as explained further in note 7 to the financial statements.  The largest exceptional cost in 2016 was a £4.1m non-cash impairment charge (2015: £9.6m non-cash impairment charge) recorded against the carrying value of the Group's tangible fixed assets, further details of which are provided in note 11 to the financial statements.  The impairment charge for 2016 arose largely from an experience based reduction in the likely future cash contribution achievable from the V1 rooms.  We now believe that a certain degree of managed services is likely to be required for all deployments, reducing the contribution and net cash inflows available from the V1 stock of rooms (compared with our initial modelling) which in turn gives rise to an increased impairment on a value in use basis.

Finance expenses increased as a result of a one-off £0.5m expense associated with the re-measurement of the finance lease liability as described in note 16.

Cash flows

The Group's net cash outflow from operating activities improved in the year to £3.1m outflow (2015: £7.2m outflow) because of the improved trading performance offset by the negative impact of a working capital reversal with a net outflow to reduce payables.

The Group's cash outflows from investing activities reduced significantly as we curtailed the new asset investment programmes, which featured in 2015, and disposed of surplus equipment.  As a result, there was a small net cash inflow (from disposals) in 2016 compared to the £4.4m outflow in 2015.

In January 2016, the Group completed a new equity placing to raise £4.5m net of expenses.

The Group serviced the capital element of its debt with a cash outflow to finance lease creditors of £1.9m in the year (2015: £0.8m).  The cash outflow increase includes a payment of £1.3m of restricted cash to repay debt as part of the amendment agreed in November 2016 as detailed in Note 20.

The Group ended the year with £2.4m of cash (2015: £2.3m) and no restricted cash (2015: £1.3m).

Funding and net debt

On 2 September 2014, the Group entered a sale and leaseback arrangement whereby it sold its V1 portable rooms to third party provider of asset finance and leased them back for a primary term of 7.5 years, with secondary periods available. The assets under lease included 578 rooms in the amount of £10m, which was drawn down in full on 24 October 2014. 

Net debt at 31 December 2016 was £5.5m (2015: £5.4m net debt).  Further information concerning the Group's cash and debt position can be found in notes 16, 20 and 22 to these financial statements.

Taxation

The Group has incurred significant trading losses in the current and prior year and as a result, no corporation tax charge has been made in the current or prior year.

At 31 December 2016, the Group had gross unrecognised tax losses carried forward for offset against future trading profits of approximately £24m (2015: £20m) and gross unrecognised deferred capital allowances of approximately £6m (2015: £6m).  As a result, the Group is unlikely to pay corporation tax in the short to medium term.  No deferred tax assets have been recognised because of the uncertainty over the timing of any likely recovery.

Principal risk and uncertainties

As described in the Chairman's Statement section of this Strategic Report, the Group earns revenue from the provision of accommodation to customers.

The Board recognises that there are a number of risk factors that have the potential to adversely affect the Group's execution of its strategic plan and, more generally, the Group's operations, its financial performance or the value of its equities.

The Directors have carried out an assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity.  A description of those risks and an explanation of how they are being managed or mitigated is set out below.

Adequacy of funding / liquidity and going concern

Impact on Group

Assessment of change in risk in year

Mitigation of risk

As referred to in the Strategic Report: The Group has historically been loss making with negative cash flows and this trend has so far continued into 2017 albeit on an improved basis; and The Group has a significant debt burden and a net debt financial position.  Failure to improve trading significantly in the short to medium term would raise doubts as to the adequacy of funding, liquidity and ultimately the Group's ability to service debt and continue as a going concern.

The Group has reduced its central overheads and capital expenditure to a significantly lower level than 2015 and also stabilised operations. 

During 2016, negotiations with the primary lender allowed for a significant portion of the debt to be repaid with cash held by the Group in escrow (and therefore of no operational use to the Group).  This reduces the debt outstanding and future interest payable.

The Board has begun executing against the revised strategy set out in 2016 and is now at the key stage of finalising negotiations for deployment of its V1 accommodation.

The Board has commenced constructive discussions with the Group's primary lender concerning potential amendments to the capital structure of the Group. 

Note 2 to the financial statements provides further information concerning adequacy of funding, liquidity and going concern.

Failure to grow new revenues

Impact on Group

Assessment of change in risk in year

Mitigation of risk

Growing new revenues is critical to achieving the Group's key business objectives.  A failure to grow new revenues either to the target levels required or where they are delayed further into the future than planned, would jeopardise the Group's ability to deliver against its business objectives.

Stabilisation of the Group's operations has improved the chances of winning new opportunities for deployment.

 

Additional strategic focus is being placed on the markets and accommodation assets that the Board believes have the highest potential to grow new higher margin revenues.

The cost base and capital expenditure has been significantly reduced, consistent with delivery of the Group's overall objectives whilst balancing the delivery of a quality guest experience.

We have identified a number of partners to assist with our operational activity and securing new sales that should help mitigate this risk.

 

 

Failure to control operational risks

Impact on Group

Assessment of change in risk in year

Mitigation of risk

Operational risks to be managed include: project risk (controlled delivery of new and existing projects), deployment (and extraction) risk and customer service risk (guest experience).  Failure to control these risks would have a negative impact on the Group's ability to deliver against its business objectives either because planned cash flows would be reduced or the potential to earn revenues from guests would be adversely affected.

This risk increased during 2015 as the Group expanded its operations.

During 2016 and into 2017, the operational risk profile decreased as controls were put in place and operations stabilised.

 

In 2016 and on into 2017, the Board has made changes to mitigate this risk through a clear strategic focus on business objectives and improvement in operations, including the use of preferred contractors.

Failure to respond to market risks and competition

Impact on Group

Assessment of change in risk in year

Mitigation of risk

There is a risk that the market for the Group's product declines or that competition increases, reducing the ability to win work at all, or at appropriate margins. Failure to control this risk will have an adverse impact on the Group's ability to deliver against its business objectives.

This risk has not changed in the year.

The Group continues to focus on, and invest in, its key market and competitive differentiators of: (1) the ability to rapidly deploy accommodation to satisfy customer requirements and (2) provide accommodation that is at the upper end of the quality and standard available from competitors. 

 

 

The Strategic Report was approved by the Board of Directors and was signed on its behalf by:

 

 

Chris Errington
Executive Chairman
29 June 2017

 


Consolidated Statement of Comprehensive Income

For the year ended 31 December 2016


Note

Year ended
31 Dec 2016
£'000

Year ended
31 Dec 2015
£'000

REVENUE

4

2,416

5,821





Cost of sales


(401)

(2,517)





GROSS PROFIT


2,015

3,304





Logistics, deployment and equipment hire


(1,295)

(3,557)





CONTRIBUTION TO CENTRAL OVERHEADS

4

720

(253)





Administrative expenses


(8,064)

(17,647)





ADJUSTED EBITDA


(2,024)

(5,960)





Exceptional items - impairment and restructuring costs

7

(4,400)

(9,910)





Depreciation

11

(1,004)

(1,962)





Equity-settled share-based payment credit / (charge)


84

(68)





LOSS FROM OPERATING ACTIVITIES

5

(7,344)

(17,900)





Finance income

8

10

25





Finance expenses

8

(1,581)

(1,009)





LOSS BEFORE TAXATION


(8,915)

(18,884)





Taxation

9

-

-





LOSS AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR


(8,915)

(18,884)





Loss per share - basic and diluted (pence)

10

(3.03)p

(8.91)p

 

 

Gross profit

Profit after hotel operation costs have been deducted from revenue

Contribution to central overheads

Profit / (loss) after logistics, deployment and equipment hire have been deducted from gross profit

Adjusted EBITDA

Earnings before interest, tax, depreciation and amortisation and before exceptional costs and equity-settled share-based payment charges

Consolidated Statement of Financial Position

As at 31 December 2016


GROUP



Note

2016
£'000

2015
£'000


ASSETS





NON-CURRENT ASSETS





Property, plant and equipment

11

3,477

8,537


Investments

12

-

-


TOTAL NON-CURRENT ASSETS


3,477

8,537







CURRENT ASSETS





Trade and other receivables

14

326

1,527


Restricted cash and cash equivalents

22

-

1,281


Cash and cash equivalents

22

2,360

2,345


TOTAL CURRENT ASSETS


2,686

5,153







TOTAL ASSETS


6,163

13,690







LIABILITIES





CURRENT LIABILITIES





Trade and other payables

15

787

2,805


Loans and borrowings

16

368

1,097


TOTAL CURRENT LIABILITIES


1,155

3,902







NON-CURRENT LIABILITIES





Provisions

15

80

-


Loans and borrowings

16

7,526

7,911


TOTAL NON-CURRENT LIABILITIES


7,606

7,911







TOTAL LIABILITIES


8,761

11,813







TOTAL NET (LIABILITIES) / ASSETS


(2,598)

1,877







EQUITY





Share capital

17

2,952

2,119


Share premium


40,700

37,009


Other reserve


718

718


Merger reserve


-

-


Retained earnings


(46,968)

(37,969)







TOTAL (DEFICIT) / EQUITY


(2,598)

1,877


 

Consolidated Statement of Cash Flows

For the year ended 31 December 2016



GROUP


Note

2016
£'000

2015
£'000

CASH FLOWS FROM OPERATING ACTIVITIES




Loss before taxation for the year


(8,915)

(18,884)

Depreciation


1,004

1,962

Fixed asset impairment charge

7

4,085

9,560

Equity-settled share-based payment adjustment


(84)

68

Net finance expenses


1,570

984

Decrease / (increase) in inventories


-

26

(Increase) in trade and other receivables


1,210

(151)

(Decrease) / increase in trade and other payables


(2,032)

(725)

Increase in provisions


80

-

NET CASH OUTFLOW FROM OPERATING ACTIVITIES


(3,082)

(7,160)





CASH FLOWS FROM INVESTING ACTIVITIES




Interest received


10

25

Payments to acquire property, plant and equipment


(29)

(4,387)

Receipts from disposal of property, plant and equipment


31

-

NET CASH GENERATED FROM / (USED IN) INVESTING ACTIVITIES


12

(4,362)





CASH FLOWS FROM FINANCING ACTIVITIES




Issue of equity shares net of issue costs net of issue costs


4,524

-

Interest paid


(866)

(961)

Repayment of finance lease creditors


(1,854)

(804)

NET CASH GENERATED FROM / (USED IN) FINANCING ACTIVITIES


1,804

(1,765)





NET (DECREASE) IN CASH AND CASH EQUIVALENTS


(1,266)

(13,287)





Cash and cash equivalents at beginning of year


3,626

16,913





CASH AND CASH EQUIVALENTS AT END OF YEAR

22

2,360

3,626

 

A cash flow statement has not been prepared for the Company as the Company does not have a bank account; all cash amounts in respect of the Company are received or paid by its subsidiary and recharged via the inter-company account.

The accompanying accounting policies and notes form an integral part of these financial statements.

Statement of Changes in Equity

For the year ended 31 December 2016

GROUP

Called up share capital
£'000

Share premium
£'000

Other reserve
£'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 the year

-

-

-

(18,884)

(18,884)

Equity-settled share-based payment credit

-

-

-

68

68

AT 31 DECEMBER 2015

2,119

37,009

718

(37,969)

1,877

Loss and total comprehensive income for the year

-

-

-

(8,915)

(8,915)

Equity-settled share-based payment debit

-

-

-

(84)

(84)

Issue of new equity shares

833

4,167

-

-

5,000

Share issue costs

-

(476)

-

-

(476)

AT 31 DECEMBER 2016

2,952

40,700

718

(46,968)

(2,598)







 

 

 

Notes to the preliminary financial information for year ended 31 December 2016

1.General information

Snoozebox Holdings plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on the Alternative Investment Market (AIM) of the London Stock Exchange. This preliminary announcement was authorised for issue by the Board of Directors on 29 June 2017.  The basis of preparation of this preliminary announcement is set out below.

The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 December 2015 or 2016, but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts: their reports on the years ended 31 December 2015 and 31 December 2016 were not qualified but did both draw attention by way of an emphasis of matter to a material uncertainty related to the Group and Company's ability to continue as a going concern.

The following emphasis of matter paragraph has been extracted, unedited, from the Independent Auditors' Report on the financial statements for the year ended 31 December 2016:

Emphasis of matter - Going concern

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in note 2 to the financial statements concerning the group and company's ability to continue as a going concern. The Directors have prepared forecasts of the group's cash flows which indicate that the group will be able to operate within the facilities expected to be available to it. The forecasts assume that the directors will reach formal agreement with the finance company which owns the major fixed assets of the group to defer certain cash flows due under the existing arrangement between the parties. In addition the forecasts include assumptions on turnover and costs which may not be achieved, in which case further funding would be required.  The Directors are confident of being able to achieve the forecasts and reach formal agreement with the finance company, however there can be no guarantee that these will be met. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group and company was unable to continue as a going concern.

Neither the audit report for the year ended 31 December 2015 nor that for the year ended 31 December 2016 contained statements under s498 (2) or (3) of the Companies Act 2006.

The financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRSs) but it does not comply with all of the disclosure requirements in IFRSs.  The accounting policies used in the preparation of this financial information included in this preliminary announcement are consistent with those that have been applied in the Company's audited financial statements for the years ended 31 December 2016 and 2015.

Certain note numbers referred to in this preliminary announcement relate to the full audited annual financial report.

Copies of this announcement can be obtained from the Company's registered office at 60 Trafalgar Square, London, WC2N 5DS.

The full financial statements which comply with IFRSs and have been audited will be posted to shareholders before the end of June 2017, are available to members of the public at the registered office of the Company from that date and will be available shortly on the Company's website: www.snoozebox.com.

2.Going concern basis

The following going concern basis section has been extracted in unedited format from note 2 to the financial statements for the year ended 31 December 2016:

Going concern basis

The Directors are required to report whether the business is a going concern, with supporting assumptions and qualifications as necessary.

The Group's business activities, recent trading performance, net debt position, cash flows and principal risks and uncertainties are described in the Operating and Financial Review section of the Strategic Report. In light of these factors the Directors have performed a detailed review of the Group's ability to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report, to determine whether it is appropriate to continue to adopt the going concern basis in preparing these financial statements.

Forecasts, assumptions and sensitivities

The Directors have prepared detailed cash flow forecasts for the five years to 31 December 2021 based on their current expectations of trading prospects, likely contract wins and cost efficiencies arising from the new strategic focus described in the Chairman's Statement section of the Strategic Report. These forecasts take account of reasonably possible changes in trading performance and cash flows.

The Directors believe that the critical assumptions inherent in these cash flow forecasts are:

·     New customers. The primary source of new sales is forecast to be the Semi-Permanent division and the Directors anticipate deploying the majority of existing V1 room assets on a Semi-Permanent basis in a gradual and phased manner commencing in the second half of 2017 and continuing through to 31 December 2021, earning revenues and margins sufficient to cover the cash outflows associated with central overheads and lower levels of capital expenditure;

·     Debt servicing and levels. The Directors continue to have constructive discussions with the primary lender concerning the level of debt and the repayment profile.   In the short term and by concession with rights reserved, the primary lender has (immediately prior to the date of this report) agreed not to enforce the quarterly capital and interest payment obligations for July 2017 through to and including April 2018 (totalling £1.7m).  This recent concessionary change is in addition to, and modifies, the debt amendment of November 2016.  In addition, both parties have commenced discussions concerning the longer-term capital structure of the Group, which if successfully concluded would result in a more sustainable long-term capital structure for the Group in its restructured form; and

·     Central overheads. The Directors have assumed that central overheads will be contained to approximately £0.1m per month, reducing slightly as existing and committed property operating leases expire.

The Directors have performed a sensitivity analysis on the forecast assumptions and determined the forecast is most sensitive to the assumptions concerning new customers and debt servicing / level, as follows:

·     Deployment of the existing V1 room assets is planned to commence in the 4th quarter of 2017, initially with 80 rooms deployed earning revenues from that point with rooms deployed increasing in a phased manner moving into 2021.  The Directors estimate that, in the absence of other corrective action, the effect of a delay in the deployment dates, and resulting revenue flows, for V1 accommodation deployment in the forecast by 3 months would necessitate access to new funding in early 2018; and

·     The forecasts are fundamentally sensitive to: (1) the quarterly capital and interest payment holiday impacting July 2017 through to and including April 2018 remaining in place and not being withdrawn and (2) a successful conclusion of discussions with the primary lender concerning a suitable longer-term capital structure.  A change to the existing capital structure and debt servicing obligations, once the four quarter repayment holiday ends, is required for the Group to continue as a going concern.  In forming their overall going concern conclusion, the Directors have assumed that the quarterly payment holiday will apply for the stated four quarters as agreed and that in the longer-term the parties will agree an appropriate capital structure for the Group to resolve the existing and significant level of debt and reduce future obligations to a sustainable level. If the agreement for a full four quarter payment holiday is reversed at any point (other than against increased revenue from Semi-Permanent deployment of V1 rooms) then this event would cast significant doubt on the Group's ability to continue as a going concern.

Other matters considered

The Directors have, amongst other matters, also taken into account the following in forming their conclusions on the going concern assumption:

·     Execution of new sales will be the key factor in the achievement of objectives.  The current level of qualified Semi-Permanent sales opportunities is good;

·     The Group is in constructive discussions with its primary lender, who remains supportive of the Directors' strategy and plans.  Throughout 2016 the Group paid all of its debt capital and interest payment obligations (as amended by the November 16 debt amendment) as they fell due and has continued to do so to the date of this report;

·     Trading in the new financial year to 30 April 2017 has been in line with the Board's expectations with overheads reduced to the £0.1m per month target and operations stabilised;

Conclusion

Whilst there is a material uncertainty which may cast significant doubt about the ability of the Group and Company to continue as a going concern, the Directors have concluded that there is a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future, a period of not less than twelve months from the date of this report, and that it is appropriate to continue to adopt the going concern basis in preparing these financial statements.

3.Segment information

For management purposes, the Group is organised into the following reportable segments: Events and Semi-Permanent. The Events segment includes all activities providing short-term hotel accommodation at popular events and festivals. The Semi-Permanent segment includes all activities in relation to the provision of long-term managed hotel solutions.


2016


2015


Events

£'000

Semi-Permanent
£'000

Total

£'000


Events

£'000

Semi-Permanent
£'000

Total

£'000

REVENUE

1,000

1,416

2,416


1,783

4,038

5,821

Cost of sales

(276)

(125)

(401)


(1,182)

(1,335)

(2,517)

GROSS PROFIT

724

1,291

2,015


601

2,703

3,304

Logistics, deployment and equipment hire

(838)

(457)

(1,295)


(2,037)

(1,520)

(3,557)

CONTRIBUTION TO CENTRAL OVERHEADS

(114)

834

720


(1,436)

1,183

(253)

 

In 2016, revenues from a single customer totalled £1.2m which is reported in the Semi-Permanent segment (2015: £3.2m from a single customer reported in the Semi-Permanent segment).

Geographical segments

Revenue and non-current assets by geographical area are as follows:


Revenue


Non-current assets


2016
£'000

2015
£'000


2016
£'000

2015
£'000

United Kingdom

1,201

2,592


3,477

7,403

Rest of the World - South Atlantic

1,215

3,229


-

1,134







Total

2,416

5,821


3,477

8,537

 

For the purposes of the analysis of revenue, geographical markets are defined as the country or area in which the service is provided. Non-current assets are allocated based on their location as at the period end.

4.Exceptional items


GROUP


2016
£'000

2015
£'000

Reorganisation costs

350

350

Profit on disposal of tangible fixed assets

(35)

-

Tangible fixed asset impairment charge

4,085

9,560




Exceptional charge

4,400

9,910

 

5.Loss per share


GROUP


2016

2015

Loss per share (basic and diluted) - pence

3.03p

8.91p

 

Loss per share

2016


2015


Loss
£'000

Weighted average number of shares

Loss per share


Loss
£'000

Weighted average number of shares

Loss per share

 

Loss per share (basic and diluted)

(8,915)

294,032,574

(3.03)p


(18,884)

211,840,727

(8.91)p

 

All share options have been excluded when calculating the diluted EPS in both 2016 and 2015 as they were anti-dilutive.

6.Property, plant and equipment

GROUP

Hotel Rooms £'000

Hotel Furniture & Equipment £'000

IT Equipment £'000

Motor Vehicles £'000

Total
£'000

Cost






AT 31 DECEMBER 2014

20,312

1,586

203

245

22,346

Additions

4,156

194

30

8

4,388

AT 31 DECEMBER 2015

24,468

1,780

233

253

26,734

Additions

16

13

-

-

29

Disposals

-

-

-

(92)

(92)

AT 31 DECEMBER 2016

24,484

1,793

233

161

26,671







Accumulated depreciation






AT 31 DECEMBER 2014

5,698

781

90

106

6,675

Charge for the year

1,606

242

52

62

1,962

Impairment charge

9,068

400

48

44

9,560

AT 31 DECEMBER 2015

16,372

1,423

190

212

18,197

Charge for the year

843

104

17

40

1,004

Impairment charge

3,969

103

13

-

4,085

Disposals

-

-

-

(92)

(92)

AT 31 DECEMBER 2016

21,184

1,630

220

160

23,194







Net book value






AT 31 DECEMBER 2016

3,300

163

13

1

3,477







AT 31 DECEMBER 2015

8,096

357

43

41

8,537

 

The net book value of assets held under finance leases included in the table above is as follows:

GROUP

Hotel Rooms £'000

Hotel Furniture & Equipment £'000

IT Equipment £'000

Motor Vehicles £'000

Total
£'000







Net book value






AT 31 DECEMBER 2016

2,150

2

-

-

2,152







AT 31 DECEMBER 2015

5,274

7

-

37

5,318

 

Impairment of property, plant and equipment

The Directors have carried out impairment testing of the recoverable amount of property, plant and equipment following indicators of impairment arising from the Group's trading performance and financial position in 2016. As a result of this review, an impairment loss of £4.09m has been recognised in the financial statements for 2016 (2015: £9.56m).

Carrying value

For the purposes of this impairment testing, the Directors have identified the property, plant and equipment directly attributable to each CGU and that generate cash flows for that CGU largely independent of other assets. These assets primarily comprise the Hotel class of assets within property, plant and equipment.

Corporate assets are those property, plant and equipment assets that do not themselves generate independent cash inflows, but instead act to support the Group's CGUs in general. These corporate assets comprise the classes of fittings and equipment, IT equipment and motor vehicles and have been allocated to each CGU weighted by the relative number of rooms. The allocation of these corporate assets to CGUs has been performed based on the weighting of room numbers available within each CGU, which the Directors believe is a reasonable basis for the purpose of impairment testing.

The following table summarises the carrying amount of the Group's property, plant and equipment within each CGU, the allocation of corporate assets, recoverable amount and resulting impairment charge:

Year ended 31 December 2016

Semi-Permanent
CGU
£'000

Events

CGU
£'000

Corporate assets

£'000

Total NBV


£'000

Carrying value

7,200

70

213

7,483

Allocation of corporate assets to CGUs

213

-

(213)

-

Carrying value

7,413

70

-

7,483






Recoverable amount

3,398

-

-

3,398






Impairment charge

(4,015)

(70)

-

(4,085)

 

Year ended 31 December 2015

Semi-Permanent
CGU
£'000

Events

CGU
£'000

Corporate assets

£'000

Total NBV


£'000

Carrying value

15,967

1,197

932

18,096

Allocation of corporate assets to CGUs

695

237

(932)

-

Carrying value

16,662

1,434

-

18,096






Recoverable amount

8,337

199

-

8,536






Impairment charge

(8,325)

(1,235)

-

(9,560)

 

Working capital balances are excluded from the carrying amounts of each CGU. Where assets are held under finance leases, the finance lease liability has been excluded from the carrying amount and the lease payments excluded from the value in use calculation used to determine the recoverable amount.

Recoverable amount

The CGU recoverable amount has been established by calculating its value in use, which is the present value of the future cash flows expected to be derived from the CGU over future periods. The period in the case of the Events CGU is 5 years whilst that of the Semi-Permanent CGU is 10 years. The 10 year life for the Semi-Permanent CGU has been selected based on the Directors estimate of the economic life of these particular assets, when compared to the assets in the Events CGU, arising from their robust construction. Each future period is discounted back at a discount rate to take account of the time value of money.

The cash flows used in the value in use calculation are based on budgets formally approved by the Board for 2017 to 2019 (2015: 2016 - 2018).  Future periods after 2019 are expected to largely repeat 2019 performance. The key assumptions relevant to the Group in establishing the value in use are:

·     Estimated future cash flows. An estimation of the expected future cash flows and, in particular, the timing and quantum of cash inflows from customers, deployment cash outflows and capital expenditure cash outflows, including:

Only cash inflows from room use (i.e. assuming no additional income from other sources) and cash outflows necessary to generate those future cash inflows and can be directly attributed, or allocated, on a reasonable basis use are considered, including cash outflows to prepare the asset for use (deployment cash outflows), to maintain their current condition and to extract assets from use; and

Overhead costs relating to the day-to-day servicing of the assets, as well as future overheads costs, are only included to the extent they can be attributed directly, or allocated on a reasonable basis;

·     Discount rate. The discount factor used to establish the value of future cash flows in the forecast period and the terminal period. The Group has applied the Weighted Average Cost of Capital ("WACC") model in establishing a suitable discount rate and risk adjusted the component parts of the WACC to take account of the Group's specific circumstances, including a normalisation of the debt to equity ratio, adding a risk premium to the cost of equity and adjusting to a pre-tax basis; and

·     Growth rates.  No growth rates have been applied to the forecast revenues.

A pre-tax discount rate of 19.5% (2015: 19.5%) has been applied to the Semi-Permanent CGU and 20.3% (2015: 20.3%) to the Events CGU cash flows.

Sensitivity analysis

The calculation of recoverable amount is most sensitive to the amount and timing of revenue and discount rate being applied.

The effect of a delay in the deployment dates, and resulting revenue, for V1 accommodation deployment in the forecast by 3 months is to increase the overall impairment by £0.7m.  The effect of a 1% increase in the discount rate applied is to increase the overall impairment by £0.1m.

7.Loans and borrowings

The book value and fair value of loans and borrowings are as follows:


GROUP


COMPANY


2016
£'000

2015
£'000


2016
£'000

2015
£'000

NON-CURRENT






Finance lease liabilities

7,526

7,911


-

-


7,526

7,911


-

-







CURRENT






Finance lease liabilities

368

1,097


-

-


368

1,097


-

-







Total loans and borrowings

7,894

9,008


-

-

 

The finance lease liabilities are disclosed as current and non-current liabilities based on the finance lease agreements in place at 31 December 2016.  No amendments have been made to these disclosures following the concessions made by the primary lender as disclosed in note 2 which had the effect of removing all the obligations falling due within 12 months of the balance sheet date.

Borrowings are shown net of unamortised issue costs of £373,000 (2015: £443,000) which have been recorded as a reduction in the proceeds of the loan and are being amortised over the term of the facility. The amortisation charged to the Income Statement during the year was £70,000 (2015: £70,000).

The Group has amended its plans and now anticipates taking up the lease extension option available in the lease.  Accordingly, the revised cash flows have been remeasured using the original effective interest rate, leading to an increase in the lease liability and a corresponding finance expense of £527,000.

8.Lease commitments - Obligations under finance leases

Obligations under finance leases

Future minimum lease payments and their present value under finance lease agreements were as follows:


GROUP 2016


GROUP 2015


Total finance lease £'000

Future interest charges
£'000

Capital element of finance lease
£'000


Total finance lease £'000

Future interest charges
£'000

Capital element of finance lease
£'000









Within 1 year

980

612

368


1,959

863

1,096

Between 1 and 5 years

7,710

1,975

5,735


7,676

2,225

5,451

After 5 years

2,042

251

1,791


2,678

217

2,461










10,732

2,838

7,894


12,313

3,305

9,008

 

The finance lease liabilities are disclosed as current and non-current liabilities based on the finance lease agreements in place at 31 December 2016.  No amendments have been made to these disclosures following the concessions made by the primary lender as disclosed in note 2 which had the effect of removing all the obligations falling due within 12 months of the balance sheet date.

Obligations under finance leases are stated net of unamortised arrangement costs of £373,000 (2015: £443,000).

On 2 September 2014, the Group entered into a sale and leaseback arrangement whereby it sold its first-generation portable hotel rooms to a provider of asset finance (the primary lender) and leased them back for a primary term of 7.5 years with secondary periods available. The assets under lease include 578 rooms in the amount of £10,000,000, which was drawn down on 24 October 2014.  Snoozebox Limited is the Group's borrowing party.

At initiation, the leaseback arrangement contained the following key terms:

·     a fixed schedule of cash repayments for the term of the agreement;

·     an embedded finance rate of 9.5% per annum; and

·     an obligation to maintain a cash balance (an escrow balance) in a bank account managed by the Group charged in favour of the lender for the term of the lease, with £1.3m placed into this escrow account attracting a nominal credit interest rate at initiation. This escrow balance has been reported as 'Restricted cash and cash equivalents'. The balance to be retained in escrow was to be calculated following the end of a financial year based on EBITDA performance for that prior year and the prospective EBITDA performance for the next year. Where EBITDA performance fell below a minimum multiple of annual rent payments, additional cash was required to be added to the escrow account, and, where it fell above the minimum, cash was permitted to be withdrawn from the escrow account.

In the first half of 2016, the Group initiated discussions with its primary lender seeking an amendment to its debt servicing obligations.   The following amendments were subsequently agreed with the primary lender in November 2016:

·     Debt servicing payments for each of the quarters ending January 2017, April 2017 and July 2017 were reduced to interest only, resulting in quarterly payments due of £0.18m per quarter.  The total payable over these three quarters was reduced to £0.54m compared to £1.4m of capital and interest debt servicing payments that was due for these three quarters prior to the amendment;

·     Subsequent debt servicing quarterly payments commencing October 2017 would comprise interest and capital resulting in quarterly payments due of £0.5m per quarter, giving a total interest and capital debt servicing payment of £2.0m per annum, a level consistent with the £2.0m due per annum prior to the amendment.  Debt servicing payments remained due in January, April, July and October each year, with the overall repayment term unchanged and a final quarterly payment due in April 2022;

·     The escrow balance held by the Group in a 'restricted cash' bank account, equal to £1.3m at the date of the amendment (£1.3m at 31 December 2015), was transferred to the primary lender and applied against the outstanding capital balance, reducing the gross outstanding capital balance due under the finance lease.  As set out in note 22, the escrow balance was reduced to nil as result of this transfer; and

·     The requirement to maintain an escrow balance based on financial performance and certain other obligations was suspended pending the outcome of discussions with the primary lender, which are ongoing at the date of these financial statements.

Further to the November 2016 debt amendment noted above, in the short term and by concession with rights reserved, the primary lender has (immediately prior to the date of this report) agreed not to enforce the quarterly debt capital and interest payment obligations for July 2017 through to and including April 2018 (totalling £1.7m).  In addition, both parties have commenced discussions concerning the longer-term capital structure of the Group, which if successfully concluded would result in a more sustainable long-term capital structure for the Group in its restructure form.

The lease finance is secured on the fixed assets included in the sale and leaseback arrangement.

9.Notes supporting the cash flow statement

Cash and cash equivalents for the purposes of the cash flow statement comprise:


GROUP


2016
£'000

2015
£'000

Restricted cash and cash equivalents

-

1,281

Cash and cash equivalents

2,360

2,345





2,360

3,626

 

In November 2016, the Group agreed an amendment to its debt servicing obligations as set out in note 8 which included the utilisation of the restricted cash and cash equivalents balance in settlement of an element of the capital balance outstanding with the primary lender.

 

 


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